DIYARBAKIR, Turkey - Jailed Kurdish rebel leader Abdullah Ocalan ordered his fighters on Thursday to cease fire and withdraw from Turkish soil as a step to ending a conflict that has killed 40,000 people, riven the country and battered its economy.

Hundreds of thousands of Kurds gathered in the regional centre of Diyarbakir cheered and waved banners bearing Ocalan's moustachioed image when a statement by the rebel leader, held since 1999 on a prison island in the Marmara Sea, was read out by a Kurdish politician.

"Let guns be silenced and politics dominate," he said to a sea of red-yellow-green Kurdish flags. "The stage has been reached where our armed forces should withdraw beyond the borders...It's not the end. It's the start of a new era."

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