ISTANBUL, Turkey - Thousands of mourners gathered in southeast Turkey on Friday for the funerals of 35 Kurdish civilians who were killed in a botched raid by Turkish military jets that mistook the group for Kurdish rebels based in Iraq.

Turkish television footage showed people, many weeping and lamenting the dead, as they gathered after the air strikes Wednesday that killed a group of smugglers along the border, one of the deadliest episodes in the conflict between the Turkish state and Kurdish rebels who took up arms in 1984.

In a second day of civil unrest, stone-throwing demonstrators clashed with police who fired tear gas and water cannon in several cities in the mostly Kurdish southeast. Firat, a pro-Kurdish news agency, said 30 people were arrested in Diyarbakir, the region's biggest city. One person was injured and six arrested in Van city, according to the state-run Anadolu news agency.

Trade unionists and other groups planned a protest in Istanbul later Friday. About 500 Iraqi Kurds denounced the airstrikes in a rally in the city of Irbil in the Kurdish-controlled region of northern Iraq.

Noncombatants have often been caught in the crossfire of Turkey's war, but one of the highest civilian tolls in a single day further soured relations between the government and ethnic Kurds who have long faced discrimination. A government campaign to reconcile with Kurds by granting them more rights has stalled amid a surge in fighting this year.

Dogan news agency video showed people digging graves on a hill near the southeast village of Gulyazi, home of some of the slain smugglers, and the funeral rites quickly took on a political tone. Thousands of people walked along a mountain path with coffins draped in red, yellow and green, the colours associated with Kurdish identity and the rebel group PKK.

In the crowd footage, one poster showed an image of Abdullah Ocalan, the jailed chief of the PKK, whose Kurdish acronym stands for Kurdistan Workers' Party. The government, which along with the West says the rebels are a terrorist group, has had secretive contact with Ocalan at his island prison as part of its effort to make peace with Kurdish opponents.

Families at the funerals urged rebels to take revenge and they accused Turkish Prime Minister Recep Tayyip Erdogan of being a "murderer," according to Firat, a pro-Kurdish news agency.

A sombre Erdogan described the attack near the border village of Ortasu in Sirnak province as "unfortunate" and "saddening," noting half the dead were under 20 years old. He said two F-16 planes bombed the area after images provided by drones showed a 40-person group approaching the border from the Iraqi side.

"It was revealed later that they were part of a group smuggling cigarettes, diesel fuel and such," he said.

Usually, according to Erdogan, such smuggling is done by groups of just three to five people. He said at least two recent deadly attacks on military outposts near the Iraq-Turkey border were carried out by guerrillas who smuggled guns across the border on mules.

Four hours of official video footage of the raid will be examined, he said.

The prime minister criticized Turkey's Taraf newspaper, which has published reports of alleged military schemes and misconduct in the past, for a headline that read: "The state bombed its own people."

"No state would intentionally bomb its people," he said. "In the past, such things may have occurred but it is not possible for such a thing to occur during our administration."

The remarks touched on the complex power dynamics in modern Turkey, where Erdogan, a devout Muslim with a strong electoral mandate, has undercut the political clout of the military, a traditional guardian of secular ideals.

In an email statement, the PKK did not distinguish between the civilian government and the armed forces in its blame for what it called a "massacre," and referred to "technical and intelligence support" provided by the United States.

The United States recently deployed four Predator drones to Turkey from Iraq following the American troops' withdrawal from the country to assist Turkey in its fight against the rebels.

The Kurdish conflict is a drag on Turkey's efforts to burnish its image as a regional model and advocate for democratic change in neighbouring countries such as Syria, where thousands have died since an uprising began in March.

Foreign Minister Ahmet Davutoglu, a chief architect of Turkey's rising profile, said the airstrikes would be thoroughly investigated and should not be exploited for political gain. Another top official, Deputy Prime Minister Bulent Arinc, said the inquiry would not be a whitewash.

"If there is any negligence, any fault or any intention, those who are responsible will be found and will endure the consequences," Arinc said.

The military issued a message of condolence that was carried on Anadolu news agency. There was no apology, but such a public outreach is highly unusual in the Turkish armed forces, which are traditionally tightlipped about operations.

"We wish God's mercy and grace to those who lost their lives in the cross-border incident of Dec. 28, 2011, and extend our condolences to their family and friends," the statement said. Last week, the military reported the deaths of 48 suspected rebels in offensives backed by air power.

Kurds make up around 20 per cent of Turkey's 74 million people. While many have assimilated and are not politically active, a significant number feel marginalized and want autonomy in Kurdish-dominated southeast Turkey. The rebels have long used northern Iraq as a springboard for hit-and-run attacks on Turkish targets.

The government has taken conciliatory steps, allowing Kurdish-language institutes and private Kurdish courses as well as Kurdish television broadcasts. But Kurdish activists say far more needs to be done to heal scars dating from a time when the Kurdish language was banned, and cite police roundups of Kurdish politicians, journalists and others suspected of rebel links as a sign of intolerance for the minority.