Ocalan, the leader of the outlawed Kurdish Workers' Party (PKK) called Thursday for his fighters to halt hostilities and withdraw from Turkey as part of a peace accord seen by many as a major step towards ending the 29-year conflict that has cost more than 40,000 lives, most of them Kurds.

"Let guns be silenced and politics dominate," Ocalan wrote in a letter written from his prison cell which was read by a Kurdish legislator in the Kurdish language at a mass rally.

"The stage has been reached where our armed forces should withdraw beyond the borders," he wrote, adding "we are at a stage where our armed elements should withdraw from Turkey."

"It's not the end, it's the start of a new era."

A crowd of more than a quarter of a million Kurds gathered for the rally in the mainly Kurdish city of Diyarbakir, waving placards with photos of Ocalan and chanting slogans calling for his release.

A giant banner across the front of the stage in the main square read "democratic solution, freedom for our leader Ocalan," as the crowd chanted "in peace as in war, we are with you, chief!"

The ceasefire call brings to an end months of secret peace negotiations between Turkey's spy agency and Ocalan, who is currently serving a life sentence for treason on Imrili island off the coast of Istanbul in the Sea of Marmara.

Turkey announced in December it was negotiating with Ocalan with the intent of persuading the PKK to disarm and retreat. The talks, Turkey said, began last year after a dramatic rise in attacks by Kurdish militants against its security force.

The group is considered a terrorist organization by Turkey and its Western allies.

Following the statement, which coincided with the Kurdish New Year, Turkey's Prime Minister Recep Tayyip Erdogan said he was putting his faith in the peace process "even if it costs me my political career."

jlw/dr (Reuters, AP, AFP, dpa)