Turkey has been alarmed by the expansion of Kurdish sway in northern Syria since the start of the conflict in 2011. The YPG controls nearly all of Syria's northern frontier with Turkey, and has been a close ally of the United States in the campaign against Islamic State in Syria.
But Ankara views the group as an extension of the Kurdistan Workers Party (PKK), which has waged a three-decade-old insurgency for autonomy in southeast Turkey.
Prime Minister Ahmet Davutoglu said on Saturday the shelling had taken place under "the rules of engagement against forces that represented a threat in Azaz and the surrounding area".
He demanded that the Menagh base be evacuated and said he had spoken to U.S. Vice President Joe Biden to make that point and stress that the PYD was an extension of the PKK and a direct threat to Turkey.
The shelling intensified at 2 a.m. (0000 GMT) before dying down but not stopping, said the Observatory, which reports on the war using a network of sources on the ground.