WRAPUP 1-Turkey says may launch incursion, US urges talks

CIZRE, Turkey, Oct 28 (Reuters) - Turkey said on Sunday that a military solution was still on the table to tackle Kurdish separatists in northern Iraq, while Washington urged dialogue to avert an incursion it fears will destabilise the region.

Turkish-Iraqi talks aimed at preventing a cross-border operation into northern Iraq collapsed late on Friday as Ankara rejected Iraqi proposals as insufficient.

Turkey has massed up to 100,000 troops, backed by fighters, helicopter gunships and tanks on the border for a possible offensive against about 3,000 rebels using Iraq as a base from which to carry out attacks in Turkey.

"For example, we can use or continue to use diplomatic means, or resort to military means. All of these are on the table, so to speak," Foreign Minister Ali Babacan said in translated comments on Iran's Press TV television channel.

Alongside diplomatic initiatives, Turkey has used stiff rhetoric seen as an attempt to press the United States and Iraq into action. Prime Minister Tayyip Erdogan said on Saturday a military operation could be carried out whenever it was needed.

Ankara has demanded Iraq hand over all northern Iraq-based members of the Kurdistan Workers Party (PKK), which is blamed for more than 30,000 deaths since the start of its separatist campaign in southeast Turkey in 1984.

But the central government has little control over semi-autonomous northern Iraq run by the Kurdistan Regional Government (KRG), whose leader Masoud Barzani has vowed not to hand over anyone to Turkey.

"I will not hand over any person to any regional state no matter the cost, however, in truth, I will not allow any PKK official to use the Kurdistan region as a base or to be present here and threaten the security of Turkey," Barzani said in an interview with Al Jazeera television aired on Sunday.

"I will expel him from the Kurdistan region but I will not hand him over."

Iranian President Mahmoud Ahmadinejad told Iraq overnight that he supported a crackdown on the PKK but wanted a peaceful solution to the crisis. Iran also has a Kurdish minority and has faced cross-border attacks by rebels, to which it has also responded by shelling targets inside Iraq.

US VISIT

The United States fears a Turkish incursion could destabilise the relatively peaceful north of Iraq and the wider region. It called for continued dialogue after the failed Ankara talks, at which it was also represented.

"We want to encourage this ongoing Turkish-Iraqi dialogue," said State Department spokesman Rob McInturff. "We want to encourage both sides to come to the table and stay at the table."

Turkish-U.S. ties have deteriorated sharply in recent weeks but Erdogan is due to visit President George W. Bush on Nov. 5.

Senior Turkish diplomats say Erdogan has given Washington and Baghdad a limited time to show steps to be taken against the PKK or concrete results. The meeting in Washington will be the last chance, they told Reuters.

The head of the armed forces has also been quoted as saying the military is waiting for Erdogan's return from Washington, though the prime minister has played down such comments, saying an operation could be launched at any time.

The military has recently carried out as many as 24 limited operations but no major land incursions against the PKK in northern Iraq, Deputy Prime Minister Cemil Cicek said on Friday. Turkish helicopter gunships and F-16 jets have attacked rebel positions inside Iraq in recent days.

Analysts question whether a major military assault into northern Iraq would succeed, as past attacks failed to dislodge the PKK, whose members are also in Turkey.

(Additional reporting by Andrew Marshall in Baghdad, Fredrik Dahl in Tehran)