Turkey's parliament resoundingly approved a motion on Wednesday allowing troops to cross into northern Iraq to crush Kurdish rebels hiding there, brushing aside appeals from the United States and the Baghdad government.
As parliament voted in Ankara, U.S. President George W. Bush said it would not be in Turkey's interests to send troops into northern Iraq.
Washington fears a Turkish incursion could destabilize the most peaceful part of Iraq and possibly the wider region by encouraging others such as arch-foe Iran to intervene.
Turkish Prime Minister Tayyip Erdogan has played down expectations of any imminent attack, but the parliamentary vote gives NATO's second biggest army the legal basis to cross the mountainous border as and when it sees fit.
Ankara's stance has helped propel global oil prices to new record highs above $88 a barrel, though they eased on Wednesday.
"We have proposed this motion for the peace and welfare of our country. After accepting this motion, we will do what is necessary for the country's interests," Deputy Prime Minister Cemil Cicek told parliament.
Cicek stressed that any military action would target only the rebels of the outlawed Kurdistan Workers Party (PKK). He said the government would also continue to use economic and diplomatic measures in its fight against terrorism.
Opposition parties, rallying behind the government, slammed U.S. policy in the region, reiterating Turkish fears it will lead to the creation of an independent Kurdish state in northern Iraq -- a move Ankara fears could fan separatism among its own large ethnic Kurdish population.
Only the small pro-Kurdish Democratic Society Party (DTP) spoke against the motion, arguing that military action would worsen the economic plight of Turkey's mainly Kurdish southeast.
Threat to Caspian Pipeline
Fearing possible rebel sabotage, Turkey has beefed up security for a major oil pipeline carrying Caspian crude from the Azeri capital Baku via Georgia to the Turkish Mediterranean port of Ceyhan, a senior energy ministry source told Reuters.
Iraqi Prime Minister Nuri al-Maliki telephoned Erdogan to reiterate his commitment to combating the PKK. Baghdad said it would send a high-level delegation to Turkey.
Iraqi President Jalal Talabani, who is a Kurd, condemned the PKK tactics but urged Turkey to show restraint.
"We consider the activities of the PKK against the interests of the Kurdish people and against the interests of Turkey. We have asked the PKK to stop fighting and end military activity," Talabani said during a visit to Paris.
NATO Secretary General Jaap de Hoop Scheffer, U.N. Secretary-General Ban Ki-moon and France joined the chorus of calls for restraint and a diplomatic solution to the crisis.
Syrian President Bashar al-Assad said during an official visit to Ankara he backed Turkey's fight against terrorism.
Ankara blames the PKK, considered a terrorist organization by the United States and the European Union, for the deaths of more than 30,000 people since the group launched its armed struggle for an ethnic homeland in southeast Turkey in 1984.
Analysts say that despite its tough rhetoric Turkey may limit itself to aerial bombardment of rebel targets and small forays across the border while avoiding a major incursion.