TUNCELI, Turkey (Reuters) - Kurdish separatist rebels said on Friday they were crossing back into Turkey to target politicians and police after Ankara said it was preparing to attack them in the mountains of northern Iraq.

As regional tensions rose, Prime Minister Tayyip Erdogan cautioned that relations between Ankara and Washington were in danger over a U.S. congressional resolution branding as genocide massacres of Armenians by Ottoman Turks in 1915.

Washington harbors growing concerns about the possibility of a major Turkish military incursion to crush Kurdish rebels seeking a homeland in eastern Turkey. U.S. officials fear such an action could destabilize a relatively peaceful area of Iraq.

Ankara recalled its ambassador from the United States for consultations after the U.S. vote, which was strongly condemned in predominantly Muslim but secular Turkey.

“We don’t need anyone’s advice on northern Iraq and the operation to be carried out there,” Erdogan told a cheering crowd in Istanbul, after saying that the United States “came tens of thousands of kilometers and attacked Iraq without asking anyone’s permission”.

Referring to relations with the United States and the Armenian resolution, Erdogan, using a Turkish idiom usually employed to describe relations, said: “Where the rope is worn thin, may it break off.” He did not elaborate.

“All prospects look bad ... and relations with the U.S. have already gone down the drain,” Semih Idiz, a veteran Turkish commentator, told Reuters.

“If Turkey sets its mind on something, whether wrong or right it will do it. The invasion of Cyprus in 1974 is a good example,” he said, referring to a Turkish invasion of northern Cyprus which drew U.S. condemnation and sanctions.

A statement by the Kurdistan Workers Party (PKK) could increase domestic pressure on Ankara to launch a big offensive that Washington fears could have ramifications in the region.

The United States relies heavily on Turkish bases to supply its war effort in Iraq.

Erdogan said his government was ready for any world criticism if Turkey launched an attack against some 3,000 PKK rebels who use north Iraq as a base to attack Turkish targets.

Ankara blames the PKK for the deaths of more than 30,000 people since the group launched its armed struggle for an ethnic homeland in southeast Turkey in 1984.

Some analysts say an offensive became more likely after the U.S. House of Representatives Foreign Affairs Committee approved the bill on Wednesday. Relations with Washington have hitherto been a strong restraining force on Turkey.

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Turkey denies that genocide was committed but said many died in inter-ethnic fighting. It remains a sensitive issue, but many Turks are starting to more openly discuss such past taboos.

The PKK statement moved world oil prices back above $83 a barrel, traders said. The Kirkuk oil fields of northern Iraq feed export pipelines running north into Turkey.

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ERDOGAN FACES MOUNTING PRESSURE

After a sharp escalation of attacks by Kurdish militants on Turkish troops, Erdogan’s government, which faces pressure from the public and the army to act, has decided to seek approval from parliament next week for a major operation.

Erdogan said he wanted to secure approval now to avoid spending time later if and when an operation was warranted.

U.S. Secretary of State Condoleezza Rice called Erdogan on Thursday to express her disappointment at the U.S. Armenian bill, which the White House has tried to stop.

The non-binding Armenian resolution now goes to the floor of the U.S. House of Representatives, where Democrat leaders say there will be a vote next month. The resolution was proposed by a politician with many Armenian-Americans in his district.

Turkey has cautioned that the bill would have negative consequences for bilateral ties. Potential moves could include blocking U.S. access to the Incirlik air base, cancelling army contracts, downscaling bilateral visits, denying air space to U.S. aircraft, and halting joint exercises.

Iraqi Defence Minister Abdul-Qadir Mohammed Jasim held talks with Turkey’s ambassador to Baghdad on Friday to seek ways to improve bilateral ties in fighting terrorism.

Erdogan said Turkey respected Iraq’s unity but if it did

nothing to stop the PKK, considered a terrorist organization group by Washington, Ankara and the EU, then Ankara had to act.

Analysts and diplomats cast doubt on whether PKK rebels would leave their Iraqi hideouts for the southeast of Turkey where tens of thousands of heavily armed troops are positioned.

“The guerrillas are not moving to the south (northern Iraq); on the contrary they are moving to ... places in the north,” the PKK said in a statement published on Firat news agency.

The PKK said its fighters planned to carry out attacks against the ruling AK Party, the main opposition CHP and the police unless certain conditions were met. It did not elaborate.