Ankara: Turkey’s prime minister will hold talks on Saturday with Iraqi Kurdish leader Massoud Barzani aimed at restarting a stalled peace process, with decades-old divisions between Ankara and the Kurds far from over.

The talks — branded “historic” by Prime minister Recep Tayyip Erdogan — come at a sensitive time for the Turkish government after a peace deal with Kurdish rebels stalled in September.

Erdogan said he and Barzani, who is highly respected by Turkey’s own Kurds, would meet in the Kurdish-majority province of Diyarbakir in Turkey’s southeast.

“The choice of the city, the cradle of Kurds, is certainly symbolic,” a source close to the government said.

“The Turkish government wants to demonstrate its commitment to ending the Kurdish conflict at a time when business is not going so well.”

Thousands of rebels from Turkey’s outlawed Kurdistan Workers’ Party (PKK) remain holed up in the autonomous north of Iraq, an area under Barzani’s control, using the region as a springboard for attacks on Turkish targets as part of their campaign for self-rule in southeastern Turkey.

Turkey’s “Kurdish question” has been in a thorn in Ankara’s side since the modern republic was founded in 1923 with a constitution that failed to recognise its Kurdish population as a separate minority.

The Kurds, a distinct Sunni Muslim people, make up an estimated 20 per cent of Turkey’s population but are also scattered across Iraq, Iran and Syria.

Some 45,000 people have been killed in the conflict since the PKK took up arms in 1984.

Diyarbakir was where a letter written by jailed Kurdish rebel leader Abdullah Ocalan from his prison cell was read out to large crowds in March, appealing for a ceasefire with Turkey.

Ocalan’s declaration followed months of clandestine negotiations with Ankara with the ultimate goal of disarming the PKK, classified as a terrorist organisation by the government and its Western allies.

But the PKK announced in September it had stopped the withdrawal of Kurdish fighters from Turkish soil to their bases in northern Iraq, saying Ankara had not kept its side of the bargain in granting greater rights.

Turkey’s Kurds want constitutional recognition, a degree of regional autonomy and Kurdish-language education in public schools. The ceasefire, however, has been respected by the two parties, with no major clashes since December 2012.

“In this difficult context, it’s obviously wise for Turkey to show that it is no longer seeking conflict but peace,” said the source.

In the past Barzani has criticised Turkish military operations against PKK hideouts in the north of Iraq.

Turkey has often accused the Iraqi Kurds of tolerating and even aiding the rebels, but in a major policy shift, Ankara has forged close ties with Iraqi Kurds in recent years.

Meanwhile, in late March Erdogan confirmed that his government was discussing the terms of an energy partnership with Iraqi Kurds, a project that could aggravate tensions in the troubled region.

Any energy deal threatens to worsen a long-running dispute between Baghdad and the autonomous Kurdistan region in northern Iraq over the exploitation of the country’s energy wealth.

Barzani’s visit also comes after Tuesday’s declaration by the powerful Kurdish Democratic Union Party (PYD) of Syrian Kurds of a temporary autonomous administration in the country’s north.

Like Turkey, Barzani’s government has not made secret its concerns over the PYD move after its victory over jihadist groups in Syria.

Kurdish regions of Syria have been administered by local Kurdish councils since forces loyal to Syrian President Bashar Al Assad withdrew in the middle of 2012.

The redeployment was seen as a tactical move by Damascus to free up forces to battle rebels elsewhere and encourage Syrian Kurds to avoid allying with the opposition.