Turkish warplanes, helicopters and artillery bombed suspected hideouts of Kurdish rebels in remote, mountainous terrain of northern Iraq Saturday.
But Iraq's Oil Ministry ruled out halting oil exports through Turkey due to the ongoing military operations. (See More Below.)
Crude oil sold near $99 a barrel on the New York Mercantile Exchange Fridayas energy traders reacted to Turkey's initial ground thrust into Iraq.
The Turkish military said at least 35 Kurdish rebels and two Turkish soldiers died in fighting Saturday. A total of seven soldiers and at least 79 rebels have been killed in Iraq since Turkey launched a ground incursion late Thursday, according to the military. The rebel Kurdistan Workers' Party, or PKK, claimed it had killed 15 Turkish troops.
The incursion is the first confirmed Turkish military ground operation in Iraq since the U.S.-led invasion that toppled Saddam Hussein in 2003. Iraq's government criticized the offensive on Saturday, saying military force will not solve the Kurdish problem.
"We know the threats that Turkey is facing but military operations will not solve the PKK problem. Turkey has resorted to military options, but this never resulted in a good thing," Iraqi government spokesman Ali al-Dabbagh said.
The rebels are fighting for autonomy in predominantly Kurdish southeastern Turkey and have carried out attacks on Turkish targets from bases in the semiautonomous Kurdish region of northern Iraq. The conflict started in 1984 and has claimed as many as 40,000 lives.
Turkey has assured the U.S.-backed Iraqi government that the operation would be limited to attacks on rebels. The United States and European Union consider the PKK a terrorist group.
Iraq's Kurdish president, Massoud Barzani, warned Turkey it will face large-scale resistance if it targets civilians in its ground incursion.
The Turkish military said it had attacked rebel hideouts with fighter jets, helicopter gunships and artillery. The hideouts had ammunition and explosives inside, the military statement said.
Turkey's state run news agency, Anatolia, said warplanes bombed suspected rebel bases in the Qandil mountain range, near the border between Iraq and Iran.
The PKK said it killed 15 troops in Saturday's clashes and was in possession of their bodies, the pro-Kurdish news agency Firat reported, citing rebel spokesman Ozgur Gabar. It was not possible to independently confirm the conflicting casualty tolls.
Coffins of some soldiers killed in Iraq, draped in red and white Turkish flags, were flown home, Associated Press Television News footage showed.
An Associated Press reporter saw four Sikorsky helicopters used to transport soldiers and two Super Cobra attack helicopters flying Saturday toward the border from the town of Cukurca, the closest point on the Turkish side to the combat area.
West of Cukurca, soldiers in Besta swept roads for land mines. Dozens of troops carrying assault rifles, light mortars, rocket-propelled grenades and sleeping mats patrolled near mountains with snow-covered peaks.
The Iraqi government said Saturday that fewer than 1,000 Turkish troops had crossed the frontier. Turkish media reports have put the number in the thousands.
The Iraqi government spokesman al-Dabbagh said Turkish commanders had assured Iraq that the "operation will be a limited one and it will not violate certain standards that they have set."
Al-Dabbagh said Iraq's president and prime minister had spoken to Turkish officials.
Turkey staged about two dozen attacks in Iraq during the rule of Saddam. Results were mixed; rebels suffered combat losses but regrouped after Turkish forces withdrew.
The PKK militants are fighting for autonomy in predominantly Kurdish southeastern Turkey and have carried out attacks on Turkish targets from bases in northern Iraq. The conflict started in 1984 and has claimed as many as 40,000 lives.
Turkey's government has complained that Iraqi and U.S. authorities were not doing enough to stop guerrilla operations.
No Halt to Shipments, Iraq Says
Iraq's Oil Ministry on Saturday ruled out halting oil exports through Turkey due to ongoing military operations on the border, its spokesman said.
"Turkish military operations will not affect pumping oil through this pipeline as both Iraqi and Turkish governments are keen not to halt it," Assem Jihad told The Associated Press in a telephone interview.
Iraq's oil exports rose 9.2 percent last year, largely because improved security allowed oil shipments through a key northern pipeline from the Kirkuk oil fields to Turkey's Ceyhan terminal on the Mediterranean Sea.
Total oil exports in 2007 reached nearly 600 million barrels, an average of 1.6 million per day. More than 550 million barrels were exported from Basra while nearly 40 million barrels were exported from the north.
The pipeline, which was often halted in past years due to sabotage, is now pumping more than 300,000 barrels per day.