Turkish Prime Minister Tayyip Erdogan called on Baghdad on Friday to shut down camps run by separatist Kurdish rebels in northern Iraq and to hand over guerrilla leaders.
His comments came two days after the Ankara parliament defied Washington and authorised Turkish troops to cross the mountainous border into northern Iraq to track down the rebels, who use the region as a base from which to attack Turkey.
Baghdad, backed by Washington, has urged Turkey to refrain from military action, saying this could destabilise the wider region, but has also told the rebel fighters to leave Iraq.
"What will satisfy us is the closure of all PKK (rebel) camps, including their training facilities, and the handover of the terrorist leaders to us," Erdogan told reporters after attending Friday prayers at an Istanbul mosque. Some 3,000 rebels of the outlawed Kurdistan Workers Party (PKK), including its leaders, are believed to be hiding in mainly Kurdish northern Iraq.
Erdogan is under heavy public pressure to act against the PKK after a series of deadly attacks on Turkish troops. Turkish Economy Minister Mehmet Simsek played down the economic risks connected to the Iraq crisis.
"Of course we will take further steps and respond to any pressure if needed, but I do believe Turkey's economy can withstand current pressures," he told a meeting with investors and bank analysts during a trip to Washington.
The Pentagon annoyed Turkey after Wednesday's parliamentary vote by suggesting it did not think Ankara had much appetite for a cross-border incursion. Deputy Prime Minister Cemil Cicek was quoted on Friday as saying Turkey was serious about sending troops into Iraq.
"We have made the decision and we will do what is necessary. We are not reluctant. There is no going back on this," Today's Zaman newspaper quoted Cicek as saying in an interview.
Parliament's authorisation is valid for one year. Erdogan has signalled that military operations are not imminent. Thousands of Iraqi Kurds marched on Thursday in Arbil, capital of their autonomous region, to protest against Turkey's moves and to call for peaceful dialogue. But Cicek repeated Ankara's refusal to deal directly with the Iraqi Kurds.
Ankara has accused Iraqi Kurdish leaders of sheltering and even actively supporting the PKK, a group it blames for the deaths of more than 30,000 people since it launched its armed struggle for an ethnic homeland in south-east Turkey in 1984.
Turkey also suspects the Iraqi Kurds of plotting to build an independent Kurdish state in northern Iraq, a move it fears could fan separatism among its own large ethnic Kurdish population and destabilise the whole region.