By Seyhmus Cakan
MARDIN, Turkey (Reuters) - Turkey all but ruled out direct talks with Kurdish militants to end one of the worst periods of bloodshed in a three-decade insurgency on Friday, saying the government would instead bring what it called civil society groups to the table.
In a speech in the southeastern city of Mardin, Prime Minister Ahmet Davutoglu unveiled what he billed as a new plan to bolster security and rebuild areas ravaged by conflict, but made clear the Kurdistan Workers Party (PKK) militant group would be sidelined unless it laid down weapons.
"We're starting a new period for our national unity and brotherhood. We will talk to the the people directly. We'll talk to everyone, except those who are holding guns in their hands," he told local officials and members of the ruling AK Party, including several cabinet ministers, at Mardin university.
Davutoglu said the government's plan includes economic measures such as interest-free loans for farmers.
The PKK, which says it is fighting for Kurdish autonomy, launched an insurgency in the southeast in 1984. The conflict has since killed 40,000 people, most of them Kurds, and stunted growth in a region far less developed than western Turkey.
Ankara opened peace talks with jailed PKK leader Abdullah Ocalan in late 2012. But a two-year ceasefire collapsed in July after what the government said were attacks on security forces, plunging the region into its worst violence since the 1990s.
"First they will abandon arms, only then there may be an opportunity to talk to them," Davutoglu said of the PKK, considered a terrorist group by the United States and European Union as well as by Turkey.
Davutoglu was quoted by the Milliyet newspaper as saying on Thursday talks would from now on be held in Ankara, not the island prison of Imrali, where Ocalan has been held since 1999 and where previous discussions have taken place.
He said Ocalan's past instructions had been ignored by pro-Kurdish politicians, who were acting as mediators, and that there was therefore no point in talking to him.
The Turkish army said it had killed 11 PKK fighters in the town of Cizre and seven in the Sur district of the main city of Diyarbakir on Thursday, bringing the militant death toll in the two areas to 700 since a security operation began in December.
The conflict has stunted economic growth in the southeast. Statkraft [STATKF.UL], Europe's largest producer of hydropower, said on Thursday it was suspending a major energy project in the region because of the insecurity.
(Additional reporting by Gulsen Solaker in Ankara; Writing by Ece Toksabay and Nick Tattersall; Editing by David Dolan)