"We are preparing for winter, not war," says Mr Ocalan as he bends to scoop water from the mountain stream rushing past his squat, stone cottage. He says that the corrugated iron, hauled up from the valley hundreds of feet below, will make valuable roofing material.
Mr Ocalan seems oddly relaxed for someone at the top of Turkey's most wanted list. It is difficult to believe that his fate, and that of the 5,000 battle-hardened guerrillas of the Kurdistan Workers party (Kadek, formerly the PKK) under his command, may just have been sealed by politicians in the capital, Ankara.
Yesterday the Turkish parliament approved a government motion to send up to 10,000 Turkish troops to Iraq, and Mr Ocalan and the PKK, which fought the Turkish state in a bloody guerrilla war for Kurdish rights in the 1980s and 1990s, were key bargaining points in discussions with Washington, which has been urging Turkey to send forces across the border.
Turkey's influential generals have been eager to repair the damage to US relations caused by the campaign to remove Saddam Hussein, even though Turkish public opinion is hostile to the idea.
In the face of such opposition, the prime minister, Recep Tayyip Erdogan, believed he could ease the path to deployment by getting the US to agree a joint plan of action in north Iraq that would -include a commitment to dismantle or even eliminate the PKK forces holed up in the mountains on the Iraqi side of the border.
Last week a US delegation to Turkey led by Cofer Black, the state department's anti-terrorism coordinator, bowed to Turkish pressure to make good the promises to move against the Kurdish rebel group it regards as a terrorist outfit.
"We will do everything we can to make sure that that terrorist threat is dealt with," said the US secretary of state, Colin Powell, at the weekend.
The PKK, which has renamed itself the Freedom and Democracy Congress, or Kadek, is on the state department's list of terrorist organisations.
The war with the rebel Kurds has rocked the Turkish state to its foundations. During two decades of fighting in south-east Turkey more than 30,000 people have been killed, most Kurds. More than 2 million people have been displaced and thousands of Kurdish villages destroyed.
In 1999 the group's ideological and spiritual leader, Abdullah Ocalan - Osman's elder brother - was arrested and imprisoned. Osman then led about 5,000 hardcore fighters across the mountainous south-eastern border area into Iraqi Kurdistan. Hunkering down in camps that could be reached only by foot or by mule, they called a unilateral ceasefire and toned down their orthodox Marxist-Leninist rhetoric and their demands for an independent Kurdish state.
Now they call for "full Kurdish cultural and political rights within a democratic framework" in Turkey, Syria, Iran and Iraq, all with substantial Kurdish populations. In July, the Turkish government passed a law aimed at encouraging the fighters to lay down their arms and return from Iraq. The measures did not meet the group's demands for a general amnesty - the allowances specifically excluded Mr Ocalan and the 11-member leadership council - and for being allowed to participate in Turkey's political life.
Turkish anxieties increased after the rebel leaders' decision last month to end a unilateral four-year ceasefire with Turkey, on the basis that Ankara had rejected dialogue and made only piecemeal reforms for the 15 million Kurds.
Despite the tightening of the noose, Mr Ocalan appears confident that airstrikes or ground attacks on his rebel positions can be avoided, at least for now. "I don't think the US will come to attack us as Turkey is urging them to do," he says, looking down the steep ravine that leads from his terrace. "I don't think they will allow Turkey to attack us either."
The senior commander of Kadek, a less charismatic figure than Abdullah, moves headquarters regularly to avoid capture by Turkish soldiers, a few thousand of whom are already stationed in northern Iraq to monitor rebel activity.
"We want to cooperate, not fight, with the British and the US forces to see a stable and democratic Iraq," Mr Ocalan insists, adding that his group has had a number of "informal" contacts with American forces in northern Iraq. "We are in the process of learning more about each other. But there is nothing official."
If the party's ideology and violent excesses have subsided in recent years, the discipline, commitment and organisation for which its fighters became renowned during the 90s has not diminished as they have adjusted to life in the Iraqi Kurdish mountains.
A series of turbines placed in the mountain streams provides enough electricity for six nearby villages. The group's communication centre includes satellite phones and televisions. The daily "political education" sessions continue.
And big brother is never far away. As the fighters ascend the steep ravine to headquarters, Abdullah Ocalan watches over them, his stylised portrait painted Che Guevara-style on the cliff face.
Unlike Massoud Barazani and Jalal Talabani, the Iraqi Kurd leaders who control the self-rule area - part of which the party has now hived off for itself - Mr Ocalan says he does not oppose the principle of Turkish troops in Iraq.
"But they must keep well away from Kurdish areas and not build permanent logistical bases in the north to protect supply lines south." His guerrillas "will not seek to attack Turkish forces unless they are attacked". He adds: "We adopt a position of legitimate defence. Attacking us would create problems everywhere, in Turkey and Iraq."
And the Turks must not, he insists, involve themselves in the internal politics of sensitive cities such as Mosul and Kirkuk.
Mr Ocalan wants Turkish troops to stay away from the 10,000 Turkish Kurdish refugees who live in a refugee camp run by the United Nations at Makhmour, 50 miles south of Arbil. Many of the refugees who crossed into Iraq in the early 90s to escape the fighting in south-eastern Turkey are relatives of the PKK fighters but insist they themselves are not members of the outlawed party. Ankara has claimed the camp is an unofficial training camp for the PKK.
The stakes remain high for all sides. US forces in Iraq, already stretched in the centre and the south of the country, are unlikely to want to embark on a campaign against Mr Ocalan's rebels which could mean disturbing the relative calm of the north. "We are not looking to butt heads with them right now, but ultimately [the PKK's] presence is untenable," said Lieutenant Colonel Harry Schute, who commands activities in the Kurdish controlled parts of the
former self-rule area.
Clashes with PKK guerrillas in Iraqi Kurdistan could also rekindle the Kurdish rebellion inside Turkey.
Turkey attracted notoriety internationally for its human rights abuses during the 80s and 90s when military operations against the PKK in the south-east were at their peak. Ankara's efforts to join the EU could therefore be badly damaged by revived internal conflict.
Semih Idiz, a columnist working for Turkey's Aksam newspaper, says: "Renewed hostilities could strengthen support for right-wing groups in Turkey and slow the government's reformist agenda to meet EU criteria, particularly on minority rights. It is in the old establishment's interest to keep the PKK issue alive. We need to give the reforms a chance to work." Iraq's Kurds meanwhile are opposed to action against the rebels, fearing that it would destabilise their area. They worry also that the presence of any more Turkish forces in the country would help to undermine their aspirations for a federal state.
Much of the Turkish political establishment opposes Kurdish autonomy for fear that it might arouse nationalist feelings and consequently trouble among its own Kurdish population. While Mr Ocalan's promises of "good behaviour" in Iraq may give some reassurance to the troubled US administration there, he gives no such cause for optimism to the authorities in Turkey.
"We had four years of a unilateral ceasefire, and Turkey did not give a positive answer," Mr Ocalan says. "Practically, there has been no difference in the situation of the Kurds. Of course they had some reforms but they have done nothing meaningful for us.
"The military operations have continued, Kurdish organisations and political groups are being oppressed continuously, and also the life or our leader is endangered. To our appeals for dialogue there have been neither direct nor indirect answers."
He warns that if the Turkish authorities have not responded by December 1 to requests for talks, then the rebels will take what he describes as "political and military measures".
He is vague about what this might mean but insists it would not involve an all-out campaign. "We don't want war, we want to solve the Kurdish problem in a peaceful and political way."
The Turkish government should also take better care of his brother, he warns. Abdullah Ocalan is now reported to be suffering from health problems while he is kept in solitary confinement in a prison located on Imrali island, in the sea of Marmara.
"He should be sent to a prison on the mainland with better conditions. That will make the political ground softer and help prepare the country for peace."
But Turkey's most wanted man adds chillingly: "If anything happens to him it'll be taken as a death penalty against him. The situation will get out of control, and all of Turkey will burn." (NM)
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