Arbil: Kurdish rebels killed 12 Turkish soldiers in an ambush on Sunday near the Iraqi border, prompting Prime Minister Tayyip Erdogan to call crisis talks that may authorise a cross-border military offensive.

The leader of Iraq's largely Kurdish region said it would defend itself if Turkish forces launched a cross-border incursion and attacked Kurdish targets.

"We are not going to be caught up in the PKK (Kurdistan Workers Party) and Turkish war, but if Kurdistan region is targeted, then we are going to defend our citizens," said Kurdish leader Masoud Barzani.

The Turkish military fired artillery shells into 11 areas in the northern Iraq border, while an ambush near the border killed a dozen Turkish soldiers, officials said.

At least 12 Turkish soldiers and 23 Kurdish rebels were killed in clashes near the border, Turkish officials said.

They are the first Turkish casualties since Wednesday when Turkey's parliament authorised troops to conduct cross-border incursions into northern Iraq to hunt down rebels.

Erdogan said military and government officials would meet later on Sunday to decide how Turkey should respond. "Our parliament has granted us the authority to act and within this framework we will do whatever has to be done," he said.

The attack comes as Turkey votes in a referendum that will decide whether Turkey's future presidents will be elected directly by the people instead of by parliament.