Turkish Prime Minister Recep Tayyip Erdogan expressed regret Friday for the killing of 35 Kurdish civilians in an air strike as mourners vented their fury and rebels called for an uprising.

As locals buried their dead, Erdogan admitted that the victims of Wednesday night's attack near the Iraqi border were smugglers and not separatist rebels as the army had originally claimed.

The military also offered its condolences on Friday in a rare gesture that appeared to acknowledge its error, but neither it nor Erdogan were able to assuage the sense of grief among locals.

Speaking to journalists in Istanbul, Erdogan voiced his regret for what he called an "unfortunate and distressing" incident.

"Images transmitted by drones showed a group of 40 people in the area, it was impossible to say who they were," he said. "Afterwards it was determined they were smugglers transporting cigarettes and fuel on mules."

In his first reaction to the strike by Turkish air force F-16s, Erdogan said that "no state deliberately bombs its own people."

He said that separatist rebels of the Kurdistan Workers Party (PKK) had used the same route and methods to bring weapons into Turkey to mount attacks, and called for critics to await the result of an official inquiry.

The acknowledgement that the strike had been an error was given short shrift by the PKK itself, a group regarded as a terrorist organisation both by the Ankara government and the West.

"This massacre was no accident ... It was organised and planned," Bahoz Erdal from the PKK's armed wing said in a statement.

"We urge the people of Kurdistan... to react after this massacre and seek a settling of accounts through uprisings," Erdal added.

The PKK uses the term "uprising" for sweeping civil disobedience as well as clashes with the police.

In the village of Gulyazi, home to many of the victims, locals were also unmoved by the expressions of condolences as the funerals took place.

"This was no mistake," said one young woman, who lost her cousin in the bombing. "They intentionally killed people, who were trying to earn a crust," she sobbed as she walked behind the coffin.

The bodies were transferred from a mosque in the nearby town of Uludere after early morning prayers, and driven to Gulyazi in a long convoy of ambulances and cars. Thousands of people attended the funerals.

"I want to tell the chief of the general staff that my son is a martyr. He was just 13, and he did not have any kind of weapon," cried the father of 13-year-old Vedat Encu, as his son's body was interred.

There were similar outpourings of grief and anger in Uludere.

"Damn you, Erdogan ... One day you too will know our pain," shouted one group of protesters who had gathered in the town centre.

Turkey's military command said it carried out the air strike after a spy drone spotted a group moving toward its sensitive southeastern border under cover of darkness late Wednesday, in an area known to be used by militants.

The main pro-Kurdish Peace and Democracy Party (BDP) said the planes had bombed villagers from Kurdish majority southeastern Turkey who were smuggling sugar and fuel across the border on mules and donkeys.

While branding the bombing "a massacre of civilians", BDP leader Selahattin Demirtas called on the Kurdish population to respond "by democratic means."

Several hundred people demonstrated Friday in Arbil, the capital of Iraqi Kurdistan, burning the Turkish flag. Hundreds also protested in the city of Sulaimaniyah.

The bombing had already sparked protests in Turkey on Thursday, with a demonstration in Istanbul's Taksim Square called by the BDP drawing 2,000 people.

Afterwards, several hundred youths shouting pro-PKK slogans threw stones at riot police, who responded with water cannon and tear gas.

Police also clashed with protesters in Diyarbakir and Sirnak, two mainly Kurdish towns in the southeast, firing tear gas and water cannon in response to demonstrators who threw stones and petrol bombs, local security officials said.

Clashes between Kurdish rebels and the army have escalated in recent months.

The Turkish military launched an operation on militant bases inside northern Iraq in October after a PKK attack killed 24 soldiers in the border town of Cukurca, the army's biggest loss since 1993.

The PKK took up arms in Kurdish-majority southeastern Turkey in 1984, sparking a conflict that has claimed about 45,000 lives.

Military blunder puts Turkish government in firing line
Ankara (AFP) Dec 30, 2011 - Turkey's government is struggling to contain the fall-out from a blunder in which the military killed 35 young Kurdish smugglers in an air strike they thought was directed at Kurdish separatist militants.

The conservative, Islamist-rooted Justice and Development Party (AKP) has followed previous administrations in cracking down on the separatist rebels of the Kurdistan Workers Party (PKK).

But it is no closer to finding a solution to the complaints of the country's substantial Kurdish minority.

Turkey's military said they directed Wednesday night's air strike near the Iraqi border against what they thought was a group of around 40 fighters from the PKK, with whom they have been involved in a bitter, decades-long conflict.

When the dust cleared however, the bodies were of local villagers, most of them aged between 16 and 20 years old, who had been smuggling cigarettes and fuel across the border.

Grief-stricken, enraged local villagers had denounced the attack within hours: local television pictures showed them using mules to carry the dead down off the snow-covered mountains in Uludere district.

But while the AKP conceded Thursday that there could have been a blunder, it took until Friday for Turkish Prime Minister Recep Tayyip Erdogan to unequivocally acknowledge the mistake.

Expressing regret for the killing of 35 Kurds, he offered his condolences to the victims for what he described as an "unfortunate and distressing" incident.

At the same time however, Foreign Minister Ahmet Davutoglu insisted that Turkey was engaged an anti-terrorist operation against the PKK while respecting the rule of law. Wednesday's blunder had been an exception, he said.

Media commentators and opposition politicians were scathing of the AKP's handling of the crisis.

"The state bombed its own people," was the headline in the liberal daily Taraf.

Fikret Bila, a columnist with Milliyet newspaper, remarked on CNN-Turk television: "The government is always reading to take credit, notably for economic successes.

"One wonders why no one has apologised on behalf of the government."

Kemal Kilicdaroglu, head of the main opposition Republican People's Party (CHP), called for the government to act -- and for those responsible to resign.

The outrage within the Kurdish community itself expressed itself in protests in several cities Thursday and Friday, with some protesters clashing with the police.

Down near the border with Iraq, some bereaved villagers dismissed talk of an error, accusing the army of having deliberately targeted the civilians.

The PKK itself made the same case.

"This massacre was no accident ... It was organised and planned," Bahoz Erdal of the PKK's armed wing said in a statement.

The PKK took up arms in Kurdish-majority southeastern Turkey in 1984, sparking a conflict that has claimed about 45,000 lives.

But clashes between the rebels and the army have escalated in recent months, with Turkey raiding PKK bases inside northern Iraq in October in response to an attack that killed 24 soldiers in the border town of Cukurca.

"The government cannot, must not have this affair covered up," Rusen Cakir, a specialist on the Kurdish issue, wrote in the Vatan newspaper.

"To do so would only spur the PKK on to step up its attacks."

After he came to power in 2002, Erdogan pushed through important reforms granting greater rights to the Kurds, who make up 15 million of the nation's 73 million population.

But after the heavy losses suffered by Turkey's army in October, he bowed to public pressure and hardened his line against the Kurdish rebels.

Resolving the Kurdish conflict remains one of the toughest challenges facing Turkey, the world's 17th-largest economy and a major regional player.

Wednesday's air strike only made that task harder.