(Adds Turkish army saying anti-PKK operation to continue)

By Selcuk Gokoluk

ANKARA, Dec 1 (Reuters) - Turkey said it inflicted heavy casualties on Kurdish rebels in northern Iraq on Saturday in an "intense intervention" involving helicopters, artillery and a cross-border raid by special forces.

A military official said around 100 special forces crossed into Iraqi territory to hit the Kurdistan Workers Party (PKK), a day after Prime Minister Tayyip Erdogan announced the cabinet had given a green light to such operations.

The army also fired long-range artillery and sent up to six helicopters to bomb a camp used by the PKK 20 km (12 miles) inside Iraq after spotting a group of 50 to 60 guerrillas there, the official said.

"An intense intervention was made on the group and it was detected that the terrorist group had suffered heavy casualties," the army said on its Web site.

A PKK official who asked not to be named told Reuters in Sulaimaniya, northern Iraq, there had been no operation and the group had suffered no casualties. There are an estimated 3,000 PKK rebels operating in the region.

"This news about the Turkish incursion and bombing is not true. There is no Turkish incursion or bombing in northern Iraq," the official said.

The Turkish military official said the special forces had returned to Turkish territory.

"The first operation was carried out on Dec. 1, 2007, and the operations will continue depending on the intelligence provided," the army said in a later statement.

"The operations that will be carried out solely target the PKK terror organisation and they are not against the people living in northern Iraq or the local groups as long as they do not make any hostile act against Turkish armed forces."

Earlier, a spokesman for Iraqi Kurdish leader Massoud Barzani said there had been no incursion by Turkish troops into the semi-autonomous Kurdistan region of northern Iraq. The U.S. military also said it was unaware of any incursion.

Turkey has massed up to 100,000 troops near the mountainous border, backed up by tanks, artillery and warplanes. Saturday's strike did not appear to be the long-awaited major operation by NATO member Turkey to destroy rebel bases.

"This is a limited operation condoned by the international community. I don't expect to see an escalation of violence," said Milliyet newspaper columnist Semih Idiz.

RESTRAINT

Ankara has made many threats of military action but, under heavy U.S. pressure, has so far shown restraint. Washington fears a large-scale operation could wreak havoc in the most stable part of Iraq and possibly the wider region.

Erdogan said before the army statement he hoped to get the "most effective" result from an operation.

"Our armed forces were authorised as of Nov. 28. We will watch and follow the process after this," Erdogan said.

Turkey's parliament approved a resolution on Oct. 17 giving the government the legal basis to order cross-border military operations if and when it deemed them necessary.

The resolution, approved by an overwhelming majority of lawmakers, followed a series of deadly PKK attacks on Turkish security forces that fanned an angry wave of nationalism across Turkey, a NATO member that also wants to join the EU.

It is valid for one year, and the cabinet decision this week effectively frees up the generals to act as they see necessary without seeking further political approval.

Erdogan held emergency talks with U.S. President George W. Bush on Nov. 5 in the White House, wringing from him pledges of closer cooperation, including more intelligence sharing against a group Washington also brands as terrorist.

Northern Iraqi Kurdish authorities have also taken steps to stop supplies reaching the PKK rebels in the mountains.

Ankara blames PKK for the deaths of nearly 40,000 people since the group began its armed separatist insurgency in 1984. Both the European Union and the United States list the PKK as a terrorist organisation. (Editing by Robert Woodward)

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