ISTANBUL: Gunmen opened fire on Turkish police outside an Istanbul palace and eight soldiers were killed in a bomb attack in the southeast on Wednesday, heightening a sense of crisis as the country’s political leaders struggled to form a new government.

The Istanbul governor’s office said two members of a “terrorist group” armed with hand grenades and an automatic rifle were caught after attacking the Dolmabahce palace, popular with tourists and home to the prime minister’s Istanbul offices.

There were no reports of casualties.

Militants from the Kurdistan Workers Party (PKK) meanwhile killed eight soldiers with a roadside bomb in the south-eastern province of Siirt, the military said, intensifying a conflict there after the breakdown of a two-year ceasefire last month.

Seven soldiers were also wounded in the attack and military helicopters and ambulances were dispatched to the area, the official Anatolia news agency said, adding that the clashes between the militants and soldiers were continuing.

Turkey in late July launched a dual anti-terror offensive against the self-styled Islamic State (IS) militants in Syria and the PKK following a suicide bombing in the town of Suruc blamed on IS that killed 33. But the campaign has overwhelmingly focused on the Kurdish militants, who have ripped up a 2013 ceasefire to launch daily attacks against the Turkish security forces.

Including the latest fatalities, around 50 members of the security forces have been killed in attacks blamed on the PKK over the past month, although Wednesday’s strike was by far the deadliest single incident.

The military in the last few days has refrained from air strikes on PKK bases in northern Iraq that were a hallmark of the campaign so far but launched large-scale operations on PKK strongholds in southeast Turkey.

The latest attacks came a day after Prime Minister Ahmet Davutoglu gave up on efforts to form a new government after weeks of coalition talks with the opposition failed, paving the way for a new election potentially within months.

“Because of the failure to form a government, we have to seek a solution with the will of the people ... so we are heading rapidly towards an election again,” President Tayyip Erdogan said in a televised speech.

The lira slid to a new low against the dollar as investors took fright at what some have dubbed a “perfect storm” of political uncertainty, slowing growth and deepening violence.

Published in Dawn, August 20th, 2015

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