Iraq's government on Sunday urged Turkey to withdraw its ground forces from northern Iraq, where they are battling Kurdish rebels, and to sit down for talks to resolve the crisis.
"The Iraqi government considers the unilateral Turkish military action ... a threat to the stability of the region and a violation of Iraq's sovereignty and calls on Turkey to pull its troops from Iraq as soon as possible," a government statement said.
Crude oil sold near $99 a barrel on the New York Mercantile Exchange Friday as energy traders reacted to Turkey's initial ground thrust into Iraq.
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.
Turkish troops and Kurdish PKK rebels fought close battles in northern Iraq on Sunday that left scores dead on the fourth day of a major ground offensive Baghdad and Washington fear could further destabilise Iraq.
Ankara launched the major cross-border land offensive on Thursday after months of repeated aerial bombardment of PKK targets in the remote, mountainous region. It accuses rebels of using northern Iraq as a base to stage attacks inside Turkey.
Turkey's General Staff said in a statement 33 PKK rebels, including a leader, and eight soldiers died in heavy, close combat in poor weather conditions on Sunday. It said at least 112 rebels and 15 soldiers have died since the operation to root out PKK rebels and destroy their camps began.
"The hot pursuit continues in three different regions (of northern Iraq) and our teams will carry out the operation with the same decisiveness and heroism," the General Staff said. The Kurdistan Workers Party (PKK), which has been battling for decades to create a Kurdish homeland in southeast Turkey, disputed the figures. It said 47 Turkish troops and two rebels had been killed so far.
It is virtually impossible to verify the claims of either side because the fighting is taking place in largely inaccessible terrain in tough winter conditions. Prime Minister Tayyip Erdogan sought to reassure the international community that Turkey's cross-border operation was focused on the PKK and would be limited in duration.
"Our Iraqi brothers should know that this operation is only to clean the terrorist camps and terrorists," he said.
The military confirmed that a helicopter had been rendered ineffective, but said the cause of the crash was unknown. The PKK said it shot down a Cobra attack helicopter on Saturday.
Turkish special forces were parachuted into northern Iraq on Sunday as F-16, Cobra attack helicopter and artillery fire pounded suspected PKK positions, Turkish media reported.
"The bombings are continuing by land and by air, the clashes are becoming heavier," a Turkish military source told Reuters on Sunday, adding that 25 more tanks had been sent to the region.
A senior military source told Reuters two brigades made up of 8,000 troops are taking part in the offensive. Turkish media have put the troop number at 10,000, but a senior officer with
U.S.-led coalition forces in Baghdad said it was below 1,000.
U.S., Iraqi Concerns
Washington is sharing intelligence with NATO ally Turkey on PKK movements in Iraq but has urged Ankara to limit the campaign to precise rebel targets and to bring it to a swift conclusion.
The United States and the European Union fear a prolonged military campaign inside Iraq would raise the risk of serious clashes between Turkish and Iraqi Kurdish forces and also undermine the fragile U.S.-backed government in Baghdad.
Baghdad has urged Ankara to respect its sovereignty. The autonomous Iraqi Kurdish administration of northern Iraq has vowed a tough response if civilians come under attack.
"The Kurdish Peshmerga (security) forces are on a state of alert and will defend themselves if the Turkish forces launch an incursion into areas under the control of the Kurdistan regional government," Peshmerga spokesman Jabbar Yawar told Reuters.
An official in Iraq's Northern Oil Company said the fighting would not hit Iraqi oil exports to the Turkish port of Ceyhan because the pipeline did not pass through the conflict area. U.S. Defense Secretary Robert Gates said on Sunday Turkey's campaign would not solve its problems with the rebels and urged Ankara to take political and economic steps to isolate the PKK.
Gates -- who will visit Ankara later this week -- also said NATO member Turkey should improve communication with Baghdad about the operation and other efforts against the PKK.
Tehran said that in the wake of the Turkish action Iran had reinforced its own borders with Iraq, from where Kurdish rebels allied to the PKK have operated against Iran.
Separately, the pro-PKK Firat news agency, which is based in Europe, quoted a top PKK commander in Iraq as urging Kurds in Turkish cities to join the fight against the Turkish state.
"In the big cities, Kurdish youth must give their reply to the military operations. Kurdistan's guerrillas are not just 7,000 or 10,000, they number hundreds of thousands. They are everywhere... in all Turkish cities," Bahoz Erdal said.
Turkey's impoverished, mainly Kurdish southeast has often seen violent pro-PKK protests, though the region has remained largely peaceful since the start of the ground campaign. Ankara blames the PKK for the deaths of nearly 40,000 people since the group launched its armed struggle in 1984 for an ethnic homeland in southeast Turkey. Turkey, the United States and European Union classify the PKK as a terrorist organization.
Previous Turkish military operations across the border into northern Iraq in the 1990s failed to wipe out the elusive and highly mobile guerrillas.
Total oil exports in 2007 from Iraq 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.