The Kurdish Regional Government (KRG) and the Turkish military both have denied that Turkish troops clashed with Kurdish Peshmerga forces Feb. 21 inside northern Iraq. Just a few minutes prior to the denials, Fouad Hussein, head of the office of the president of Iraq's KRG, said that Kurdish paramilitary peshmerga troops tried to stop Turkish forces from moving tanks from a base that has long been inside northern Iraq, sparking a gunfight. There was no word on casualties or on the exact location of the reported clash, although presumably the alleged incident took place near the Iraqi border with Turkey. STRATFOR cannot verify that the clashes took place, but the conflicting statements from the KRG suggest that an incident likely took place between Turkish troops and peshmerga acting on their own discretion. The KRG now needs to downplay the event to contain the situation. Now that the spring thaw is under way, Turkey has stepped up its military campaign in northern Iraq and is making preparations for a major ground incursion. According to Turkish media reports, tens of thousands of Turkish troops have massed on the Iraqi border and a convoy of some 50 military vehicles carrying special forces has moved into Turkey's southeastern province of Hakkari along the border late Feb. 20. Turkish warplanes also reportedly have been flying in Qandil, Qalaat Diza, Zarawa, Sanskar and Raniya in northern Iraq, with fresh aerial bombardments reported Feb. 21 in the village of Sedafan, 20 miles from the border. Now that Kurdistan Workers' Party (PKK) rebels are emerging from their havens in the mountains of northern Iraq, Turkey's military operations are aimed at preventing these rebels from taking positions near the border to carry out attacks inside Turkey. In the larger picture, however, Ankara clearly aims to use this military campaign to signal to the Iraqi Kurdish government that it has every intention to keep any ambitions for greater Kurdish autonomy in check. If the peshmerga-Turkish clash did indeed occur near the border, a dangerous precedent has been set for the weeks and months ahead as Turkish troops close in. The KRG does not take its autonomy for granted, and needs to be able to show it will not tolerate the United States turning a blind eye to Turkish aggression in northern Iraq. Under the threat of violence between hardened peshmerga and Turkish troops in Iraq's most stable region, Washington could be pressured to lean more heavily on Turkey to limit its military campaign. At the same time, the KRG wants to safeguard foreign investment in the region, and does not want to give Turkey any further justification to roll troops into Iraqi Kurdistan. But as this latest incident suggests, there is no guarantee the KRG can exercise full control over the peshmerga to prevent a larger conflagration should Turkey follow through on its threat of a major ground incursion into northern Iraq.