The members of the outlawed Kurdistan Workers Party (PKK) were found by security forces in a forest area in the Koycegiz district of the Mediterranean Mugla province, the state-run Anadolu news agency said.
Five suspected PKK militants were killed and security forces are pursuing two more who managed to get away, it added. One Turkish soldier was slightly wounded.
The Koycegiz region is particularly popular with British and German tourists due to its picturesque lake of the same name. The hugely popular river resort of Dalyan is nearby.
The PKK has waged an insurgency inside Turkey since 1984 which initially focused on seeking independence for Turkey's Kurdish minority but now puts more emphasis on greater rights and autonomy.
Tens of thousands of lives have been lost in the violence and the PKK is designated as a terror group by Turkey, the European Union and the United States.
The Turkish army has been waging a relentless campaign in the last months to eradicate the PKK, including air raids against the group's bases in northern Iraq.
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