Turkish Prime Minister Recep Tayyip Erdogan expressed regret Friday for the death of 35 Kurdish civilians in an air strike, saying it had been determined they were smugglers and not separatist rebels.

Speaking to journalists in Istanbul, Erdogan offered his condolences to the families of the victims for what he called an "unfortunate and distressing" incident.

Kurdish separatists in Turkey on Friday called for an uprising after an air strike killed 35 villagers near the Iraqi border in what the ruling party admitted could have been a mistake.

As locals prepared to bury their dead, the admission from  Erdogan's party did little to assuage their anger.

"Damn you, Erdogan ... One day you too will know our pain," shouted a group of protesters in Uludere, the main town in the region of the bombing.

And the call for a new "serhildan" (uprising) also served to ratchet up tensions further.

"We urge the people of Kurdistan... to react after this massacre and seek a settling of accounts through uprisings," Bahoz Erdal from the armed wing of the Kurdistan Workers' Party (PKK) said in a statement.

"This massacre was no accident ... It was organised and planned," added Erdal, whose organisation is labelled a terrorist group by Ankara and much of the West.

The PKK uses the term "uprising" for sweeping civil disobedience as well as clashes with the police.

Turkey's military command said it carried out an air strike on suspected PKK militants after a spy drone spotted a group moving toward its sensitive southeastern border under cover of darkness late Wednesday, in an area known to be used by militants.

Turkey's ruling party Thursday said the strike could have been a "blunder" that killed civilians and not Kurdish separatists and police fired tear gas to disperse stone-throwing youths in a pro-Kurdish demonstration in Istanbul.

"According to initial reports, these people were smugglers and not terrorists," said Huseyin Celik, vice-president of the Justice and Development Party (AKP).

"If it turns out to have been a mistake, a blunder, rest assured that this will not be covered up," he said, adding that it could have been an "operational accident" by the military.

The main pro-Kurdish Peace and Democracy Party (BDP) said the planes had bombed villagers from Kurdish majority southeastern Turkey who were smuggling sugar and fuel across the border on mules and donkeys.

"It's clearly a massacre of civilians, of whom the oldest is 20," BDP leader Selahattin Demirtas said in a statement that called on Turkey's Kurdish population to respond "by democratic means."

The PKK took up arms in Kurdish-majority southeastern Turkey in 1984, sparking a conflict that has claimed about 45,000 lives. It is labelled a terrorist organisation by Ankara and much of the international community.

The protest in Istanbul on Thursday called by the BDP drew 2,000 people in the city's Taksim Square.

Afterwards, several hundred youths shouting pro-PKK slogans threw stones at riot police, who responded with water cannon and tear gas, making several arrests.

Police also clashed with protesters in Diyarbakir and Sirnak, two mainly Kurdish towns in the southeast, firing tear gas and water cannon in response to demonstrators who threw stones and petrol bombs, local security officials said.

The pro-Kurdish Firat news agency released photos showing bodies wrapped in blankets, lying on the snow side by side, while television pictures showed angry and weeping villagers gathered around the bodies.

Locals used mules to carry the dead down from snowy mountain slopes in Uludere district, which lies about 20 kilometres (12 miles) from the Iraq border, local media reported.

Kitan Encu's eyes welled with tears as she recounted how she had to identify the bodies of Kurdish relatives killed in the strike.

"They openly massacred us. Why was this blood spilled? They must answer this question," said Encu, who lost 11 family members in the air raid.

"I saw the bodies to identify them. They were all burned, completely. They were in pieces," Encu said as she sat by the bedside of her 75-year-old mother in the State Hospital of Uludere.

"The oldest one was 20 years old, they were all students," the 33-year-old said.

Clashes between Kurdish rebels and the army have escalated in recent months.

The Turkish military launched an operation on militant bases inside northern Iraq in October after a PKK attack killed 24 soldiers in the border town of Cukurca, the army's biggest loss since 1993.