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Istanbul (AFP) - Eight Turkish soldiers were killed on Wednesday in the deadliest attack by Kurdish militants since the government began an anti-terror offensive last month, as the country battles its most serious security and political crises in years.
An honour guard on duty outside the fabled Dolmabahce Palace in Istanbul was also attacked by suspected Marxist militants, with the country on edge after a wave of attacks in the last month.
Turkey is meanwhile still without a permanent government after inconclusive June 7 elections and President Recep Tayyip Erdogan said the country was now "swiftly" heading to snap polls.
The political and security instability has unnerved investors, with the embattled Turkish lira plunging to fresh lows against the dollar on another bruising day.
The eight soldiers were killed by remote-controlled explosive device laid by militants on a road in the Silvan district of the province of Siirt, the army said.
The army blamed the "Separatist Terror Organisation", its customary phrase for the Kurdistan Workers' Party (PKK) which it never refers to by name.
In apparent retaliation, Turkish-F16 war planes launched evening air raids on caves and shelters of the PKK in the region of Karacali right on the border between Turkey and northern Iraq, the official Anatolia news agency reported.
Turkey in late July launched a dual anti-terror offensive against Islamic State (IS) militants in Syria and the PKK following a suicide bombing in the town of Suruc blamed on IS that killed 33.
But the campaign has overwhelmingly focused on the Kurdish militants, who have ripped up a 2013 ceasefire to launch daily attacks against the Turkish security forces.
Including the latest fatalities, around 50 members of the security forces have been killed in attacks blamed on the PKK over the past month, although Wednesday's strike was by far the deadliest single incident.
- 'Swiftly heading to polls' -
The flare up in violence comes with Turkey in an unprecedented political impasse after June 7 elections where Erdogan's ruling Justice and Development Party (AKP) lost its overall majority for the first time since coming to power in 2002.
Prime Minister Ahmet Davutoglu's coalition talks with the opposition failed, leaving the country facing a snap repeat election for the first time in its history.
Erdogan, who critics accuse of seeking fresh polls all along in the hope of the AKP winning more votes, for the first time openly acknowledged that early elections were on the way.
"We are once again swiftly heading towards an election," Erdogan said in a televised speech in Ankara, adding that the only solution in the current political impasse was turning to the "will of the nation".
He vowed that the government would press on with its anti-terror campaign and said people had to choose whether to be on the side of the state or a "terror organisation".
"You will make the choice. If we are going to die, we will die once but die like a man," he said.
The hard-right Nationalist Movement Party (MHP), which came third in the polls, meanwhile called in a doom-laden statement for martial law to be imposed in the area hit by the violence and elections to be postponed.
"Otherwise we could be faced with an inevitable, bloody civil war," its leader Devlet Bahceli said in a statement. "Turkey is slipping away from our hands."
- Istanbul's Dolmabahce attacked -
Two militants earlier Wednesday launched an attack with guns and explosives on the Dolmabahce Palace in Istanbul, one of Turkey's main tourist attractions which also houses offices of Davutoglu, the Istanbul authorities said.
The two attackers -- carrying two hand grenades, an automatic rifle, a gun and other ammunition -- were caught by police, the statement said, adding that there were no fatalities.
One policeman was reported to have been lightly wounded.
There was no immediate claim of responsibility for the attack, but Anatolia news agency said the suspects were members of the radical left wing Revolutionary People's Liberation Front (DHKP-C).
The group claimed a similar attack on the Dolmabahce Palace on January 1 where two grenades were hurled at guards which failed to explode.
The attacks and the political uncertainty added to pressure on the Turkish lira, which has lost 10.44 percent in value against the US dollar in just a month and 26 percent since the start of the year.
The lira hit a new low of 2.94 against the dollar, a loss of 1.69 percent in value and edging ever closer to the crucial 3.0 lira ceiling.