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Turkey's government says it will exhaust all diplomatic channels before launching a military strike into northern Iraq to root out the separatist PKK guerrillas, who killed at least a dozen Turkish soldiers in fighting at the weekend. The easing in rhetoric helped bring global oil prices down from record highs. A military incursion into northern Iraq would destabilise Iraq's autonomous Kurdish enclave, the only region of the country that has seen relative stability and prosperity since U.S. forces overthrew Saddam Hussein in 2003. The pro-PKK Firat news agency said eight soldiers had been captured in the fighting. Turkey has denied any of its troops were captured, but confirmed eight soldiers were missing. Turkey has deployed as many as 100,000 troops, backed by tanks, F-16 fighter jets and helicopter gunships along its border with Iraq. Turkey estimates 3,000 PKK rebels are based in Iraq.
