(Adds three killed)

By Selcuk Gokoluk

ANKARA, Nov 4 (Reuters) - Kurdish rebels on Sunday freed eight Turkish soldiers captured in an ambush last month in northern Iraq, a move which could ease public pressure on Turkey's government to launch a major cross-border incursion.

The release of the soldiers came a day after the Iraqi government vowed to hunt down Kurdistan Workers Party (PKK) militants responsible for raids into Turkey.

Washington has urged NATO-ally Turkey to refrain from sending in thousands of troops, saying it could destabilise northern Iraq and cause a bigger regional crisis.

President George W. Bush is due to discuss the situation with Turkey's Prime Minister Tayyip Erdogan in Washington on Monday.

"The eight soldiers in question returned (to) the Turkish Armed Forces on Nov. 4," the chief of staff's Web site said. Turkish TV said the soldiers flew home in a military plane and talked to their families by telephone after landing.

"The release of the Turkish soldiers is a significant move in reducing the tension," said Britain's defence secretary, who just returned from a visit to Iraq, including Iraqi Kurdistan.

"This is, though, only a first step. We need to see concrete measures taken by the Iraqi Kurdish officials to curtail the activities of the PKK," Des Browne said.

Turkey wants leaders of the PKK arrested and the closure of camps in Iraq used as bases for cross-border attacks in their 23-year campaign for a homeland in southeastern Turkey.

Fouad Hussain, head of the office of Iraqi Kurdish leader Masoud Barzani, said Iraqi Kurdish leaders helped in releasing the soldiers.

"This issue proved one thing, that the Iraqi Kurds and Iraqi leadership, they are part of the solution. And they want to have a good relationship and they work to have a good relationship with Turkish people," Hussain told reporters in Arbil.

Turkey stepped up pressure on Baghdad to act against the PKK after guerrillas killed at least 12 soldiers and captured eight in an attack on a Turkish army post near the Iraqi border last month.

Clashes between Turkish troops and PKK militants continued near the Iraqi border.

Turkish army said two PKK rebels and a village guard, fighting alongside Turkish troops, were killed in Sirnak province on Sunday.

In response to what it sees as foot-dragging by Iraq and a lack of pressure by the United States, Turkey has deployed 100,000 troops on the border and threatened to go after the PKK if nothing is done to rein them in.

The United States said it applauded the efforts of the Iraqi government to secure the Turkish soldiers' freedom.

"We urge continued, deepened and immediate cooperation between Iraq and Turkey in combating the PKK, which is a common enemy of Turkey, Iraq and the United States," said U.S. State Department spokesman Sean McCormack, who was in Jerusalem along with Secretary of State Condoleezza Rice

DELIVER MESSAGE

Abdul Rahman Chaderchi, a senior PKK member, told Reuters the eight soldiers were released without ransom or conditions as a message from PKK.

"We want Turkey to release our president Abdullah Ocalan," he said. Ocalan is serving a life sentence in prison on an island in Turkey's Sea of Marmara.

Another PKK official told Kurdish Firat news agency that the release was to help boost dialogue with Turkey.

The PKK is considered a terrorist organisation by the United States, Turkey and the European Union. Nearly 40,000 people have been killed since the PKK took up its armed struggle for Kurdish self-rule in southeast Turkey in 1984.

An escalation of separatist violence in recent weeks and the capture of the soldiers sparked public outcry in Turkey and calls for an offensive against the militants in northern Iraq.

Prime Minister Nuri al-Maliki said on Saturday his Baghdad government would do all in its power, with the help of the northern Iraqi regional government, to end the PKK threat.

While Maliki's government has little influence over the semi-autonomous Kurdish region in the north, intense diplomatic pressure may have persuaded Iraqi Kurdish leader Masoud Barzani to put pressure on the PKK, diplomats say.

(Additional reporting by Shamal Aqrawi in Arbil; David Clarke in Baghdad; Phil Stewart in Rome; Sue Pleming in Jerusalem)

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