Despite opposition from Washington and doubts within the government that the action will be effective, the prime minister Recep Tayyip Erdogan decided that the military would be allowed to conduct limited operations against the PKK army of Kurdish fighters holed up in the Qandil mountain on Iraq's border with Iran.
Iraq promptly voiced its anxiety at the decision. The Turkish and Iraqi governments signed a counter-terrorism pact 10 days ago, but it did not permit the Turkish army to conduct military operations inside Iraq.
The PKK has killed 15 Turkish soldiers and 12 civilians in ambushes in southeastern Turkey in the past 10 days, the highest casualty toll in several years.
Turkish television has repeatedly broadcast emotional scenes of the funerals of the dead soldiers, while newspaper headlines have urged the government to move into Iraq.
Mr Erdogan has been resisting pressure from the chief of staff Gen Yasar Buyukanit for months, but an emergency counter-terrorism council yesterday acceded partially to the military demands.
"The order has been given to take every kind of measure - legal, economic, political - including also a cross-border operation if necessary," the prime minister's office said following the meeting.
It specifically referred to "the terrorist organisation" operating from Kurdish-controlled northern Iraq, where the US state department estimates there are 3,000 PKK guerrillas. Mr Erdogan has been in conflict with military commanders for most of the year. In April, the military command issued a veiled threat of a coup against him. The prime minister responded by calling a snap election which he won handsomely.
Turkey is currently governed by a constitution drawn up in the early 1980s by the military following a putsch.
Mr Erdogan is drafting a new constitution that would curb military power and privileges.
With the generals repeatedly out-manoeuvred by Mr Erdogan, there was speculation that hawks in the army, as well as militants among the Kurds, may be plotting to undermine the government through the escalation of violence. The Americans are anxious that a border war between Turkey and Iraqi Kurdistan will make a bad situation worse in Iraq.
But Turkey's defence minister Vecdi Gonul emphasised that yesterday's decision applied solely to small-scale sorties into northern Iraq. The army could carry out "hot pursuit" raids across the border without government permission, but anything "large-scale" would need to be endorsed by the parliament in Ankara.
The army has already decreed 27 new security zones in the southeast bordering Iraq, Syria and Iran in apparent preparation for the cross-border action. Nozad Hadi, the governor of Irbil in Iraqi Kurdistan, warned Ankara that any invasion would be costly. "If Turkish troops decide to enter into Iraq's Kurdistan territories, their decision would be wrong and they would sustain heavy casualties and material losses," he told Associated Press television.