The bombing, which killed 10 soldiers and eight civilians, was one of the most deadly attacks on Turkish security forces since the attempted coup of July 15 when a rogue military faction tried to oust President Recep Tayyip Erdogan.
"The attack was perpetrated by a suicide bomber who detonated a van (packed) with five tonnes of explosives," Prime Minister Binali Yildirim told a news conference in Istanbul.
The attack targeted a security post in Hakkari province as security forces were searching vehicles in Semdinli district, the official news agency Anadolu said.
Militants then also started shooting, the governor's office said, quoted by Dogan news agency.
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Another 27 people were injured in the blast caused by the outlawed Kurdistan Workers' Party (PKK), Erdogan said in a written statement. Anadolu reported at least 16 of those were civilians.
Soon after the attack, which Anadolu said left a seven-metre (22-foot) deep hole in the road, the military confirmed it had begun a large-scale air operation which the governor's office said was launched to "neutralise" PKK militants.
Deputy Prime Minister Numan Kurtulmus described today's attack as an "atrocious" and "heinous terrorist attack", vowing on Twitter that Turkey would never surrender to militant groups.
Over the past two months, the military says it has killed a total of 387 PKK militants in Hakkari province, CNN-Turk reported.
The PKK has waged a 32-year insurgency against the Turkish state, which has left nearly 40,000 dead since 1984. The group is proscribed as a terrorist organisation by Turkey, the United States and the European Union.
Since the collapse of a two-and-a-half-year ceasefire in July 2015, more than 600 security forces and 7,000 PKK militants have been killed, according to Anadolu.
Hakkari is a flashpoint in the renewed conflict. yesterday the Turkish armed forces said it "neutralised" eight PKK militants in Cukurcu district after clashes with the group, Anadolu reported.