Kurdish rebels have started their gradual retreat from Turkey to bases in northern Iraq, a Kurdish party leader said, kicking off a key stage in the peace process with the Turkish government aimed at ending one of the world's bloodiest insurgencies.

Gultan Kisinak, a joint leader of a major pro-Kurdish political party in Turkey, said a first group of rebel fighters started their advance toward the border with Iraq on Wednesday.

The Kurdistan Workers Party, or PKK, declared a cease-fire in March and agreed to withdraw guerrilla fighters from the Turkish territory, heeding a call from its imprisoned leader, Abdullah Ocalan, who is engaged in talks with Turkey to end a nearly 30-year battle that has cost tens of thousands of lives.

The group, which has sought greater autonomy and more rights for Turkey's Kurds, has, however, rejected a Turkish government demand that they lay down arms before leaving the Turkish territory.

The PKK's commander, Murat Karayilan, has said that the group won't disarm until Turkey enacts democratic reforms increasing the rights of Kurds and introduces an amnesty for all imprisoned rebels, including Ocalan.

Escalating violence

The PKK rebel command warned late last month that they would strike back if they were attacked.

"Our forces will use their right to retaliate in the event of an attack, operation or bombing against our withdrawing guerrilla forces and the withdrawal will immediately stop," PKK leader Murat Karayilan had warned.

Mass withdrawals in 1999 were disrupted when Turkish forces ambushed departing rebels, killing around 500 and wrecking confidence in permanent peace.

Turkish Prime Minister Recep Tayyip Erdogan has repeatedly vowed tha retreating rebels "will not be touched".

He said Tuesday that "laying down weapons" should be the top priority for the PKK, blacklisted as a terrorist group in the West, for the process to succeed.

Karayilan said in April that they were expecting Ankara to "do its part" before giving up arms, and called for wider constitutional rights for Turkey Kurds, who constitute 20 percent of the 75 million population.

A permanent peace could transform Turkey's impoverished Kurdish-majority southeast, where investment has remained scarce and infrastructure insufficient due to the threat of clashes.

It will also impact Erdogan's political future, after he braved a severe nationalist backlash to reveal negotiations with Ocalan.

Millions of Kurds are expecting Ocalan, who narrowly escaped a death sentence in 2002 after European Union pressure, to be pardoned and join politics.

Ocalan said in March peace call that a ceasefire would be the beginning of a "new era" for the Kurdish movement.