Though the aspirations of the ethnic Kurds to create an independent state are long-standing, the origins of the current problem lie in September 2007 when a Turkish offensive against Kurdish rebels in its eastern regions began. The aim may have been to force the Kurds into negotiations, but in October the Kurdish Workers’ Party or PKK fought back. It first ambushed a unit of Turkish commandos in the largest attack of its kind for years and then killed 12 Turkish troops and captured another eight near the village of Daglica on October 21.

The fact that the PKK probably launched these raids from its hideouts within the Kurdish autonomous region in Iraq made it an international crisis rather than a mere domestic one, and a round of diplomacy ensued. Turkey’s prime minister, Recep Tayyip Erdogan, has visited his counterpart Gordon Brown in London; other regional figures such as King Abdullah of Jordan are also making efforts to alleviate the emergency.

But it is American involvement that will be the key. Unfortunately, relations between Washington and Ankara have not been good of late. Though the motion has now been shelved, moves in Congress to officially label the 1915-1917 killings of Armenians by Ottoman Turks as “genocide” strained a cordiality already damaged by Turkey’s refusal to allow its bases to be used during the 2003 invasion of Iraq. Even worse, there is a chance that the PKK’s arms may originate from America: it is said that northern Iraq is a key area in covert missions to stem the flow of Iranian support for the Iraqi insurgency.

Still, Turkey remains essential in the United States’ “War on Terror” as a logistical node for operations in Iraq and Afghanistan. A breakdown in trust caused by an incursion into northern Iraq would further jeopardize this key alliance.

Ironically, the anti-terrorist rhetoric of the Bush administration gives legitimacy to Turkish objectives to crush the PKK once and for all. It is estimated that around 37,000 have died over the years in the fight for Kurdish autonomy: indeed, the conflict is Turkey’s own “War on Terror” and Ankara feels it deserves international support.

It has openly criticized Europe, for example, for not handing over PKK members – criticism that can’t be helping Turkey’s ambition to accede to the European Union. For its part, Brussels is already reluctant to commit to Turkish membership and a military confrontation on the Iraqi border would reinforce these misgivings.

Turning to Iraq itself, the crisis is a test for the current administration led by President Jalal Talabani, himself a Kurd. Kurdish nationalism is stronger than ever, and if Iraq were to be partitioned it is perhaps the Kurds who would benefit most. The prospect of an independent Kurdish state on its border does not appeal at all to Turkey, however.

Talks between Turkey and Iraq have so far been unsuccessful, breaking down on October 26. To keep the peace, Iraq suggested that a multinational (presumably American-led) force should patrol the border and that the PKK’s logistic and financial support network should be gradually cut off. Turkey felt that this solution would be too slow, and demanded that the PKK’s leadership be immediately handed over – not something necessarily within Baghdad’s power to achieve.

Both Talabani and the president of the Iraqi Kurds, Massoud Barzani, publicly distance themselves from the PKK. However, should the Turkish military launch a cross-border strike against the PKK, Barzani’s militia force, the Peshmerga, could well become involved. After all, strictly speaking, a Turkish attack would contravene international law and the Kurdish regional government would have a right to defend itself.

It is also worth noting that Turkey is a member of NATO and if Turkey were to be attacked in retaliation then many more nations would be obliged to become involved. The prospects of a full-scale conflict do not bear thinking about.

Beyond the human suffering that will occur should diplomacy fail, on a macro level an incursion into Iraq could be the last straw for an already shaky global economy. The United States sub-prime mortgage crisis has triggered turmoil on the stock markets, and in October oil prices hit new highs of over $90 per barrel. Unless OPEC robustly steps in to settle the markets, further instability in the Middle East caused by a conflict on the Iraqi border could well send the price of oil soaring further, which in turn might engender a worldwide economic meltdown.

On the other hand, in the long term a subdued PKK would pave the way for pipeline routes from Iraq to Europe (via Turkey) to be opened up, which would not only improve Europe’s energy security but have a beneficial effect on the prosperity of Iraq and Turkey too. Thus a peaceful settlement would be in the interests of all.

The standoff continues, however, with a meeting between Erdogan and the United States President George W. Bush scheduled for November 5 looking like the critical juncture. Turkey says that it will not take military action before that date, and if diplomacy succeeds then the window of opportunity before winter closes in on the mountainous border region will be lost anyway.

The world is watching, and every party involved must work hard to ensure that the situation does not escalate further. Much is at stake, not only the position of Turkey within the international community but also the prospects for stability in Iraq and the global economy as a whole. Turkey, Iraq, the United States and the international community – particularly neighboring states in the Middle East – must all play a part in helping to easing tensions before they get out of hand.