Turkish ground forces have crossed the border into northern Iraq to target Kurdish rebels said to be sheltering there, Ankara has said.
The Turkish military has not said how many troops are involved
It said the raid began late on Thursday after an air and artillery bombardment.
Prime Minister Tayyip Erdogan has said the offensive is limited in scale and troops will return as soon as possible.
Iraqi officials say they remain unaware of any major incursion into the north, and Kurdish officials believe it took place in a remote and unpopulated area.
"The target, purpose, size and parameters of this operation are limited," said Mr Erdogan, whose comments were televised.
"Our armed forces will come back in the shortest time possible as soon as they achieve their objectives," he said, insisting that members of the Kurdistan Workers' Party (PKK) were the sole targets.
PKK fighters are known to use northern Iraq as a base
Correspondents say the aim is to isolate the organisation and prevent it using northern Iraq as a launch pad for attacks on Turkish soil.
Washington said it had been informed of the incursion in advance and said it had urged the Turks to limit their action to precise targeting of rebel Kurdish targets.
A US military spokesman in Baghdad said he believed only a few hundred Turkish troops were involved in the operation.
Meanwhile, senior Iraqi Kurdish sources told the BBC the Turkish side had exaggerated the operation, which they believe to be "very, very limited", and in a remote border area.
Earlier, Turkish broadcaster NTV reported that 10,000 soldiers had crossed the border on Thursday, a Turkish military source also confirmed for Reuters news agency that two brigades had been deployed.
The US, the EU and Turkey consider the PKK to be a "terrorist" organisation.
Turkey's military said a cross-border ground operation backed by the Air Force was launched at 1900 [1700 GMT on Thursday].
Turkey's ground incursion into northern Iraq was launched at night
Turkey has carried out at least one ground incursion, as well as frequent air and artillery strikes, against suspected PKK targets in Iraq since parliament authorised the army to act in October 2007.
But this operation's timing is unusual as the mountainous border area is still covered with heavy snow, the BBC's Sarah Rainsford reports from Istanbul.
Nor have there been any major PKK attacks inside Turkey for some time, she adds.
More than 30,000 people have been killed since the PKK began fighting for a Kurdish homeland in south-eastern Turkey in 1984.
Mystery in Baghdad
Top Iraqi Kurdish and government officials are saying there has been no crossing at the Habur bridge, the only major land route into Iraq, the BBC's Jim Muir reports from Baghdad.
Kurdistan Democratic Party militants who control the area in question inside northern Iraq say they have not detected any Turkish forces near any of their own lines.
The office of Turkish President Abdullah Gul says the leader phoned his Iraqi counterpart, Jalal Talabani, about the operation on Thursday evening.
"During the call, our president conveyed information on the objective of the ground operation," Mr Gul's office said.
Mr Talabani's office confirmed a conversation had taken place during which Mr Gul invited him to visit Ankara officially, and also assured him that any Turkish operations were against the PKK, not against the Iraqi Kurds.