Istanbul (CNN) -- Turkish Prime Minister Recep Tayyip Erdogan said Friday that he regrets the deaths of 35 civilians in a military airstrike in a Kurdish area on the border with Iraq.
Speaking to reporters in Istanbul, he said, "It is an unfortunate outcome. It is a sad outcome."
Pledging a full investigation, he said those killed late Wednesday were smuggling cigarettes and fuel, with almost half of them below the age of 20.
Erdogan said Turkey's military had been monitoring the area because it was in constant use by terrorist groups and that security forces had become suspicious because of the size of the group and number of donkeys used.
The funerals of the victims, who all came from three villages in the Uludere area of Sirnak province, should now have been conducted, he said.
His words came a day after a senior member of a Kurdish separatist group urged Kurds to rise up against Turkish authorities over what he called a massacre.
Bahoz Erdal, a member of the command council of the armed wing of the Kurdistan Workers Party, or PKK, issued the call for action on the group's official website.
"We urge all the people of Kurdistan, especially the people of Hakkari (province) and Sirnak, to react to this massacre and seek a settling of accounts through uprisings from the perpetrators of this massacre," Erdal said in a statement.
Some observers have sounded the alarm in recent months about escalating tension between Turkey and its Kurdish minority, warning it may reignite a conflict that has simmered since 1984 and claimed more than 30,000 lives.
Turkey has been going on the offensive against Kurdish separatists based across its border in northern Iraq with bombings and incursions.
Erdal dismissed comments made by the Turkish military general staff Thursday, however, as having "nothing to do with reality," saying the attack occurred inside Turkey, not in northern Iraq as the general staff said.
The general staff statement said the airstrike late Wednesday was in the Sinat-Haftanin area of northern Iraq, where many militant training camps are situated and there are no civilian settlements.
Surveillance by unmanned aerial vehicles showed a group moving from Iraq toward the border with Turkey in an area "mostly used by terrorists," it said.
Erdal disputed that claim, saying the strike by Turkish air force jets was 30 kilometers (19 miles) away from Sinat-Haftanin in Uludere, in a Kurdish-populated area of Turkey.
"We do not have any camps, bases, activity or movement in the area as claimed. This massacre is an attack against our patriotic people of Botan," he said, using the Kurdish term for the Sirnak area.
Turkish Foreign Minister Ahmet Davutoglu said Friday that Turkey did not discriminate between its citizens, only between civilians and terrorists. "Every citizen is so valuable for us," he said, quoted by the semi-official Anadolu news agency.
He described Wednesday's airstrike as an "exceptional incident" that should be investigated according to the law.
Turkey's President Abdullah Gul also said the incident was unfortunate, Anadolu reports.
A senior member of Turkey's governing Justice and Development Party (AKP) also said Thursday that indications were that those killed were civilians smuggling cigarettes.
"These people were thought to be terrorists; however, the first initial investigative information we have from the local authorities, especially from Sirnak Governor's office, indicate that these people are involved in cigarette smuggling," said the AKP's deputy chairman and spokesman Huseyin Celik.
He said the strike had killed many members of the same family.
"Even if there was a situation 100% that these people were smugglers, these people should not have been subjected to this, they should not have been bombed. It is out of question," he said.
Celik promised a full investigation into the incident.
The general staff statement released Thursday said the military had received intelligence that militants were planning to attack border outposts following recent action against Kurdish separatists.
In October, an attack killed 24 Turkish soldiers in the southeastern section of the country, where Turkey borders Iraq. The Turkish government blamed terrorists for that attack, and the United States pinned responsibility for the attack on militants from the PKK.
Earlier this month, Turkish police detained dozens of people in a wave of raids focused on pro-Kurdish media organizations.
The Kurds represent the largest ethnic minority in Turkey. For decades, they were the target of repressive government policies, implemented by officials who sometimes referred to them as "mountain Turks."
The PKK is designated as a terror organization by Turkey and the United States.
CNN's Yesim Comert contributed to this report.