* Ankara, thinking military victory unlikely, talks to Ocalan
* First confirmation that wider settlement may be on agenda
* Aim is to start disarmament in spring, paper says
* Ocalan jailed on an island near Istanbul since 1999 (Recasts with comment from Erdogan's chief adviser)
By Seda Sezer
ISTANBUL, Dec 31 (Reuters) - Turkey has begun discussing disarmament with Kurdish militants after concluding that it is unlikely to defeat them militarily, Prime Minister Tayyip Erdogan's chief adviser said on Monday.
The government has been in talks in recent months with Abdullah Ocalan, jailed leader of the Kurdistan Workers' Party (PKK), to end a hunger strike by jailed PKK members, but Monday's comment was the first confirmation that attempts to negotiate a wider peace settlement were on the agenda.
"The main aim for the government is to disarm them. You cannot get results and abolish an organisation only with armed struggle," Yalcin Akdogan said in an interview with NTV television.
He said the government was cautious about the prospects of progress: "We have to see how Qandil (PKK headquarters in northern Iraq) will react ... The organisation (PKK) also saw that they cannot get anywhere through armed struggle."
After his capture in 1999, Ocalan let it be known that he was open to a political settlement that secured more rights for the Kurds who inhabit Turkey's southeast.
In July 2011, a month after Erdogan's AKP party won a third term, he proposed peace talks with Ankara, and leaked recordings indicated that senior intelligence officials had held secret meetings with PKK leaders in Oslo.
But the initiatives ran aground, and the last nine months have been some of the bloodiest of a conflict that has now lasted almost three decades and claimed more than 40,000 lives, most of them PKK fighters.
With any hint of concessions to the PKK fiercely opposed by nationalists, and therefore politically fraught, it is not clear on what basis the government now considers it might be able to negotiate a truce.
Akdogan gave no further details but the daily Hurriyet said directors of the MIT intelligence agency had met Ocalan for four hours on Dec. 23 with the goal of issuing a declaration on ending the conflict in the first months of 2013.
"Getting the group to put down its weapons formed the main item on the agenda in the talks," the paper said, without specifying its sources.
"If the target is achieved, the PKK, which has halted operations due to winter conditions, would begin to disarm in the spring."
Hurriyet said Ocalan had demanded to be put in direct contact with the PKK, and given better jail conditions. It said he would not talk with his lawyers or the main legal pro-Kurdish party until the talks with the state were completed.
Ocalan, who founded the PKK in 1974 to fight for an independent Kurdish state, is in virtual isolation on the island of Imrali in the Sea of Marmara and has not even seen his lawyers for months.
But after he gave the order through his brother in November to end the 68-day hunger strike by hundreds of PKK militants in prisons across Turkey, it was obeyed immediately.
The justice minister then said there would be further talks with the PKK, and Akdogan made clear on Monday that Ankara saw Ocalan as its main interlocutor.
Negotiations with a group designated a terrorist organisation by Turkey, the United States and the European Union would have been unthinkable only a few years ago.
But Erdogan for his part is under pressure to stem the violence, which has included Kurdish bomb attacks in major cities as well as fighting in the mountainous southeast.
Akdogan said 10 militants had been killed in fighting in southeast Turkey on Monday.
Erdogan's government has widened cultural and language rights for Kurds, who make up around 20 percent of Turkey's 75 million population, since taking power a decade ago.
But Kurdish politicians want greater political reform including steps towards autonomy for their region. (Writing by Daren Butler; Editing by Kevin Liffey)