Turkish troops were massing along the border, with military helicopters airlifting commando units into the area overnight. Earlier Tuesday in London, Turkish Prime Minister Recep Tayyip Erdogan warned that his country cannot wait forever for the Iraqi government to move.
Iraqi Prime Minister Nouri al-Maliki ordered the offices of the Kurdistan Workers' Party, known by its Turkish acronym PKK, closed, and said the government will "not allow it to work on Iraqi territory."
The statement from al-Maliki contradicted repeated assertions by Iraqi officials in recent days that the PKK's presence in Iraq was restricted to inaccessible parts of northern Iraq that could not be reached by authorities.
Earlier, Iraqi Foreign Minister Hoshyar Zebari, himself a Kurd, said Iraq's central government and authorities in its Kurdish autonomous region in the north would work together to deny the rebels freedom of movement, funds and representative offices. He said a high-level political and military delegation would travel soon to Turkey.
Zebari insisted there was a "resolve and insistence on the part of the Iraqi government" to cooperate with Turkey to resolve the border issue "and deal with the terrorism that Turkey is subjected to."
The mix of diplomatic and military activity followed Sunday's rebel ambush near the Iraqi border that left 12 Turkish soldiers dead, 16 wounded and eight missing.
In Washington, David Satterfield - the State Department's top Iraq adviser - said leaders of the autonomous Kurdish area in northern Iraq have been lax in pursuing the rebels.
Until now, the United States had focused its public comments on Turkey, saying it should not launch a military attack onto Iraqi soil, and on the Iraqi central government in Baghdad, saying that Iraq must act against the rebels.
In his comments Tuesday, Satterfield did not directly call on the Kurdish Regional Government to use military force against the PKK but said the Kurds must cut off the PKK's movement and local means of support.
"I must tell you, and this is not anything which the Kurdish leadership is not aware of from our own voice, we are not pleased with the lack of action," Satterfield said.
Britain has backed the United States in trying to keep Turkey from crossing into Iraq to attack Kurdish rebels based there. The U.S. and others fear a Turkish attack could lead to widespread bloodshed in one of Iraq's few relatively peaceful areas.
But Turks are increasingly frustrated with the deadly rebel attacks.
"To this day, I have met the Iraqi central government four times. We have dwelled upon these issues very carefully," Erdogan said in London through an interpreter. "We waited for 14 months for this mechanism to bear fruit, but it did not, and we cannot wait forever."
Erdogan said he would continue to consult with U.S.-led forces in Iraq and the central government "whether or not they have some influence on the north," but added: "From this point forward we're also looking at the military dimension."
In Turkey, thousands gathered for the funerals of the 12 soldiers killed in the weekend ambush and to protest. Around 50,000 people marched in the western city of Aydin, the state-run Anatolia news agency reported, while some 10,000 gathered in Keskin for a soldier's funeral.
"Our patience is running out," said Ilhan Keskes, a mourner at one of the funerals, in Keskin. "The government must do something before the nation explodes."
In Baghdad, Turkish Foreign Minister Ali Babacan said rebel attacks this month alone killed 42 people. He rejected any offer of a cease-fire by the PKK.
Cease-fires are "possible between states and regular forces," Babacan said. "The problem here is that we're dealing with a terrorist organization."
The PKK has called on Turkey not to attack Iraq, claiming that a unilateral rebel cease-fire declared in June was still in place although it did not halt fighting.
"The position of the PKK is that we have agreed to a cease-fire but when we are attacked by the Turkish troops we will hit back," rebel spokesman Abdul-Rahman al-Chadarchi told The Associated Press.
He said the rebels were holding eight Turkish soldiers captive and promised to treat them with respect, although he said it was "premature" to discuss conditions for their release.
"When they were attacking us, they were our enemies but now they are helpless captives whom we will take care of," al-Chadarchi said. "When the Turkish government asks for them, we can talk about conditions."
Turkish officials said the search was continuing for soldiers from Sunday's attack and would not comment on the rebels' claims.
If confirmed, the seizure would be the largest since 1995, when guerrillas grabbed eight soldiers and took them to northern Iraq before releasing them two years later.