DIYARBAKIR, Turkey AFP) - Jailed Kurdish rebel chief Abdullah Ocalan was set to call a "historic" ceasefire on March 21, raising hopes for an end to a three-decade conflict with Turkey that has cost tens of thousands of lives.

The widely anticipated ceasefire appeal is expected to come in a letter penned by the leader of the outlawed Kurdistan Workers' Party (PKK) from his isolated island prison cell, and millions of people nationwide are set to tune in to hear his words read out on television and radio.

The ceasefire call would cap months of clandestine peace talks between Turkey's spy agency and the state's former nemesis Ocalan, who has been serving a life sentence for treason on Imrali island off Istanbul since 1999.

Prime Minister Recep Tayyip Erdogan and Ocalan, branded a "baby killer" by many Turks, both appear to have staked their political futures on the renewed push to end the 29-year armed campaign for self-rule that has killed some 45,000 people, mostly Kurds.

Mr Erdogan said he was putting his faith in the peace process "even if it costs me my political career", in the face of charges by the nationalist opposition that he was guilty of "treason". The peace talks were launched last year after a dramatic upsurge in attacks by Kurdish militants against Turkish security forces.

Ocalan's announcement has been timed to coincide with the Kurdish New Year, or Newroz, and hundreds of thousands of people have gathered for celebrations in the Kurdish-majority city of Diyarbakir in southeastern Turkey.

"We will wake up to an actual New Day, the Newroz of the new era tomorrow," prominent Kurdish lawmaker Selehattin Demirtas said on Twitter on March 20.

From the early hours, people from across Turkey poured into the main square in Diyarbakir, adorned with red, yellow and green Kurdish flags, to hear Kurdish lawmakers read Ocalan's letter both in Kurdish and Turkish.

"This is a historic day, our leader will speak," said Mr Aydin Isitmez, a 42-year-old realtor who had come from the western city of Izmir with his family.

"I believe in peace," said Mr Ahmet Kaplan, an elderly farmer from a village near Diyarbakir. "I have a son in the mountains and one in the army. It has got to stop, we need an end to mothers' tears."

A giant placard above the stage in Diyarbakir read "Democratic solution, freedom for our leader Ocalan" as thousands waved banners chanting "In peace as in war, we are with you, chief!"

A solution to Turkey's ingrained Kurdish problem could etch Mr Erdogan's name in history, in much the same way the abolition of slavery enshrined Mr Abraham Lincoln's memory for Americans a century ago, wrote Mr Murat Yetkin, editor-in-chief of the Hurriyet Daily News in February.

Ocalan - known as "Apo" or uncle to Kurds - has said he wants peace for the "democratisation of entire Turkey".

The expected ceasefire call is likely to be in return for wider constitutional rights for the up to 15 million Kurds in Turkey, as well as the release of thousands detained over links to the PKK, which is regarded as a terrorist group by Ankara and its Western allies.

The peace plan is expected to be the result of written consultations between Ocalan and fellow Kurds in Turkey and abroad under the monitoring of Turkish agents.

Ocalan is likely to call for monitoring commissions to ensure safe passage for fighters withdrawing into northern Iraq, despite assurances by Mr Erdogan that "nobody will be hurt".

The ceasefire will also test Ocalan's influence over the PKK after years of being cut off from the outside world since his jailing in 1999.

At least four previous ceasefire attempts called by Ocalan were rejected by Ankara or torpedoed by hawkish rebel groups, triggering increased violence in the country.

Asked if the new peace process would be successful, Justice Minister Sadullah Ergin told reporters "there are no guarantees".

In a sign of goodwill, the PKK last week freed eight Turkish prisoners it had been holding hostage for some two years.

Under Mr Erdogan, in power since 2002, the Kurdish minority has been granted more cultural and language rights but further reforms were dropped in the face of a nationalist backlash.