Foreign Minister Abdullah Gul said Kurdish militia who seized Kirkuk the day before started to move out of the town Friday, as Turkey meanwhile reviewed its contingency plans for a possible intervention in the region.

"The elements that had entered Kirkuk started to leave today," Gul said, adding that US reinforcements had arrived to take control of the town.

Ankara sent about 15 military observers to the region to monitor developments in line with a deal agreed with Washington, a senior diplomat said.

"They will stay there as long as necessary," he added, while a government statement said the observers would cooperate with US units in the area.

Ankara fears that taking control of local oil resources could embolden Iraqi Kurds to move towards independence, a prospect that could rekindle a separatist Kurdish rebellion in adjoining southeastern Turkey.

Kurdish fighters who poured into the other regional oil capital, Mosul, early Friday will also withdraw "in the shortest possible time," Gul said, speaking of US "guarantees" given to Ankara.

Turkey threatened to intervene militarily if the Iraqi Kurds were to seize Kirkuk and Mosul, a condition defined as one of Ankara's "red lines" on Iraq along with several other concerns.

Washington is keen to keep Turkey out, fearing clashes between the Turkish army and Kurdish groups, both US allies.

Turkey already has several thousand troops in northern Iraq, left over from cross-border operations against Turkish Kurdish rebels based in the region.

A government statement issued after a meeting of the country's leadership Friday said they "reviewed in light with recent developments the preparedness of Turkish armed forces both in northern Iraq and border regions and the reinforcement plans for those forces."

Gul said the army positions would be reinforced "if necessary," but added that no such decision had been made so far.

"What matters is that faits accomplis are not allowed in Mosul and Kirkuk. Everybody knows how determined we are on this issue," he said.

Turkish officials had said that US Secretary of State Colin Powell promised during a visit here last week that the Kurds would not be allowed to go "beyond a certain line" around Kirkuk and Mosul.

"It is obvious that the promises were not kept," the Radikal daily wrote Friday, while Hurriyet said, "This American attitude is leading to a confrontation with Turkey."

Former foreign minister Mumtaz Soysal warned that the incident could spark a confidence gap between Ankara and Washington.

"It seems the turn will soon come to the establishment of a (Kurdish) state," he said in an article in Cumhuriyet.

"Sound relations between states can be based only on mutual confidence. If what has been done is not rectified, there will be no sound relations between Turkey and America," he added.

The Iraq crisis has already strained ties between the two countries, with the Turkish parliament refusing to allow US troops to open a northern front against Baghdad from Turkish soil.

The opposition lashed out at the government for yielding to US pressure against Turkish military intervention in northern Iraq.

"Its arms tied, the government is waiting for US permission to enter northern Iraq but it is obvious that this permission will not come," said Mustafa Ozyurekli, a senior opposition legislator.

Minor demonstrations were held in Ankara and Istanbul to protest the Kurdish seizure of Kirkuk and Mosul, which were part of the Ottoman Empire until the early 1900s and which modern Turkey unsuccessfully sought to annex.

"Turkish army off to northern Iraq," protestors shouted in downtown Ankara.

Turkish sentiment were also fanned by allegations that the Turkmen, an Iraqi community of Turkish origin, had become a target of Kurdish attacks following the fall of Kirkuk, claimed by both groups as their historic homeland.

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