BAGHDAD, Oct 21 (Reuters) - Iraq's government said on Sunday it was taking important steps to end what it called the "terrorist actions" of Kurdish rebels who use its mountainous north as a base for attacks on neighbouring Turkey.

Iraqi Prime Minister Nuri al-Maliki held urgent talks with his national security team after rebels of the Kurdistan Workers Party (PKK) killed at least 12 Turkish soldiers and Turkey shelled northern Iraq.

The PKK said they had taken several soldiers hostage.

The prime minister's office said in a statement Iraq condemned the PKK. It said Iraq would work to secure the release of the hostages, although the rebels said they were not held in Iraq.

The security team discussed "the situation along the Iraqi-Turkish border and have taken important steps in relation to the activities of the PKK, which the government regards as terrorist actions", Maliki's office said.

It did not say what actions it planned to take. The Iraqi government has limited options to tackle the rebels, whose hideouts are in accessible mountainous terrain in Iraq's self- governing Kurdistan region where it has little sway.

The government has been angered by the recent actions of the PKK, whose attacks in southeastern Turkey have forced Iraq into conflict with its neighbour at a time when it is more concerned with quelling internal sectarian violence that has killed tens of thousands and displaced millions of Iraqis.

Foreign Minister Hoshiyar Zebari told Reuters in an interview last week the government wanted the PKK to leave Iraq as soon as possible. Iraqi has repeatedly stressed it wants friendly relations and dialogue with its powerful neighbour.

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