Ocalan
Members of the Kurdish community wave flags showing jailed leader Abdullah Ocalan (Reuters)

Kurdish militants have denied media reports that they are poised to pull out from Turkey under a peace deal agreed with the government in Ankara and labelled the rumours "psychological war lies".

Turkish newspapers have reported that the Kurdistan Workers Party (PKK) would announce its decision to halt hostilities in February with the disarming and withdrawal of 100 militants.

The report was backed by the pro-government Sabah newspaper, which said that the retreat was planned to begin at the start of March and would be completed by the 21st.

But the PKK dismissed the report and claimed that it was not in talks with Ankara.

"The stories on this subject are lies," the PKK said of reports of negotiations with militants in northern Iraq. "These stories are activities in a deliberate psychological war aimed at manipulation."

Sabah did not disclose its source but has close links to the government. Officials began talks with the jailed leader of the PKK, Abdullah Ocalan, in late 2012. Ocalan and other militants have reportedly abandoned their aim of an independent homeland within Turkey, and agreed to lay down all arms in March, reports said.

In exchange, Ankara will grant wider rights to Turkey's Kurdish minority of 15 million people although until now, negotiations have focused on the withdrawal of PKK militants. Prime Minister Recep Tayyip Erdogan stressed that the aim of the peace process was to convince militant groups to lay down their arms.

The rebels have also demanded the release of hundreds of imprisoned Kurdish activists and the recognition of a Kurdish identity in Turkey's new constitution.