Erdogan is under heavy pressure from Turkey's powerful armed forces and opposition parties to take tough action against rebels of the outlawed Kurdistan Workers Party (PKK) after they shot dead 13 soldiers on Sunday near the Iraqi border.

Iraq's government said that a recent security accord with Turkey was the best way for dealing with PKK attacks. The White House said it was committed to working with both NATO ally Turkey and Iraq to combat the PKK.

Defense Minister Vecdi Gonul said Turkey's parliament would need to authorize any large-scale military operation -- a scenario most analysts say remains unlikely -- but he said such permission was not required for limited, "hot pursuit" raids.

Washington has urged Turkey not to take military action in mainly Kurdish northern Iraq, fearing it could destabilize the most peaceful region of that country and indeed the wider region.

"To put an end to the terrorist organization operating in the neighboring country (Iraq), the order has been given to take every kind of measure, legal, economic, political, including also a cross-border operation if necessary," Erdogan's office said in a statement.

"Orders have been given to all relevant institutions to continue to wage a decisive struggle against terrorism and the terrorists," said the statement, issued after a special meeting of Turkey's top anti-terrorism body.

Turkey, which has NATO's second biggest army, has recently carried out small "hot pursuit" raids into northern Iraq, security sources say. And in June Iraq's government officially protested to Turkey for "intensively shelling" parts of the northern Kurdish region.

Although the White House said it would work with the two countries to beat the PKK, spokesman Gordon Johndroe would not comment specifically on whether the White House would support any Turkish incursion.

Turkey's large-scale incursions in 1995 and 1997, involving an estimated 35,000 and 50,000 troops respectively, failed to dislodge PKK rebels from the mountains.

DEADLY ATTACKS

Sunday's attack in Sirnak province was the deadliest single incident in 12 years. Two other soldiers died on Monday in separate PKK landmine explosions.

The previous week, 12 people, including village guards died when PKK rebels ambushed their minibus in Sirnak province.

Turkish television and newspapers have carried extensive pictures of the funerals, with coffins draped in the national flag and grieving wives, children and parents.

NATO Secretary-General Jaap de Hoop Scheffer condemned the latest PKK attacks and pledged the alliance's solidarity.

Financial markets are closely monitoring the debate over northern Iraq, though the lira currency and share prices did not move very much on Tuesday after Erdogan's statement.

Some analysts say the latest PKK attacks are a sign of the group's desperation after Erdogan's ruling AK Party won a large chunk of the vote in impoverished, mainly Kurdish southeast Turkey. The government has vowed more investment in the region.

Turkey signed an anti-terrorism deal on September 28 with Iraq targeting the PKK but failed to win Baghdad's consent to allow "hot pursuit" raids across the border. Their deal focuses on financial and intelligence measures against the PKK.

Ankara knows the Baghdad government has little clout in the autonomous Kurdish north, whose authorities are loathe to take action against their ethnic kin in the PKK. Turkey suspects the Iraqi Kurds want to build their own state, a move that could bolster separatism among its own large Kurdish population.

Ankara blames the PKK for the deaths of more than 30,000 people since the group began its armed campaign for an ethnic homeland in southeast Turkey in 1984.

(Additional reporting by Tabassum Zakaria in Washington, David Brunnstrom in Brussels and Mariam Karouny in Baghdad)