* Turkish military hits targets in Syria
* Government seeks approval for foreign military ops
* Mortar bomb killed five in Turkish town
* Foreign powers urge restraint
By Jonathon Burch and Murad Sezer
AKCAKALE, Turkey, Oct 4 (Reuters) - Turkey stepped up retaliatory artillery strikes on a Syrian border town on Thursday, killing several Syrian soldiers, while its parliament approved further military action in the event of another spillover of the Syrian conflict.
Seeking to unwind the most serious cross-border escalation in its 18 month-old crackdown on dissent, Damascus apologised through the United Nations for shelling which killed five civilians in southeast Turkey on Wednesday and said it would not happen again, Turkey's Deputy Prime Minister Besir Atalay said.
Syria's staunch ally Russia said it had received assurances from Damascus that the mortar strike had been a tragic accident.
But Turkey's government said "aggressive action" against its territory by Syria's military had become a serious threat to its national security and parliament approved the deployment of Turkish troops beyond its borders if needed.
"Turkey has no interest in a war with Syria. But Turkey is capable of protecting its borders and will retaliate when necessary," Ibrahim Kalin, a senior adviser to Prime Minister Tayyip Erdogan, said on his Twitter account.
"Political, diplomatic initiatives will continue," he said.
The peaceful pro-democracy movement which surfaced in March 2011 in Syria turned into a full-scale armed revolt after President Bashar al-Assad tried to crush it and is now becoming a sectarian conflict that could destablise neighbouring states.
Turkey hit back after what it called "the last straw" when the mortar hit Akcakale, killing a mother, her three children and a female relative.
Atalay said Turkey had exercised its right to retaliation and that parliament's authorisation for a foreign military deployment was not a "war memorandum".
"It's a deterrent measure taken in line with Turkey's interests, for use when it needs to protect itself," he told reporters.
Three armoured personnel carriers were positioned on the southern edge of Akcakale, their guns trained on the Syrian town of Tel Abyad a few miles across the frontier. The Syrian Observatory for Human Rights said three Syrian soldiers were killed by Turkish shelling of a military post nearby.
Syrian state media has not reported any casualties.
"We know that they have suffered losses," a Turkish security source told Reuters, without giving further details.
The observatory also reported clashes between Syrian rebels and the Syrian army at the military post, and said the rebels had killed 21 elite Republican Guards on Thursday in an ambush on an army minibus in a suburb northwest of Damascus.
The southern edge of Akcakale, right on the border, resembles a ghost town. Houses stand empty and shops are shuttered. Much of the population is ethnically Arab and many men walk around in the traditional Arab jalabiyya and red and white headscarves.
"Everyone is gone, look around," said Ibrahim Cilden, 33, who lives only a few houses away from the one which was hit on Wednesday. A new camp for Syrian refugees sits on the edge of the town but nobody has yet moved in.
"Where have they built it? Right at the exit to our town. So the Syrians fire mortars at us. We act like a magnet," he said.
Turkey's parliament had already been due to vote on Thursday on extending a five-year-old authorisation for foreign military operations, an agreement originally intended to allow strikes on Kurdish militant bases in northern Iraq.
But the memorandum signed by Erdogan and sent for parliament approval also said that despite repeated warnings and diplomatic initiatives, the Syrian military had launched aggressive action against Turkish territory, presenting a "serious threat".
"At this point the need has emerged to take the necessary measures to act promptly and swiftly against additional risks and threats," it said.
Police fired tear gas to stop a group of around 25-30 anti-war protesters chanting "We don't want war!" and "The Syrian people are our brothers!" from approaching parliament as deputies debated the motion.
It was not clear who fired the mortar into Turkey, but security sources said it had come from near Tel Abyad and that Turkey was increasing the number of troops along its border.
Syria said it was investigating the source of the mortar bomb and urged restraint. Information Minister Omran Zoabi said his country respected the sovereignty of neighbouring countries.
Russia said Damascus had vowed there would not be a repeat.
"We think it is of fundamental importance for Damascus to state that officially," RIA Novosti news agency quoted Russian Foreign Minister Sergei Lavrov as saying during a visit to Islamabad.
Turkey's military response contrasted with its relative restraint when Syria shot down a Turkish reconnaissance jet in June. Ankara increased its military presence along its 900-km (560-mile) border with Syria and called a meeting of NATO's North Atlantic Council.
At the time, Erdogan warned any Syrian element approaching Turkey's border and deemed a threat would be treated as a military target.
World leaders condemned the mortar strike but urged restraint.
British Foreign Secretary William Hague told Reuters the Turkish response was "understandable" but warned against an escalation, while EU foreign policy chief Catherine Ashton called on Syria to respect the territorial integrity of its neighbours.
German Chancellor Angela Merkel condemned Syria's actions against Turkey and urged all involved to show "common sense".
NATO said it stood by member-nation Turkey and urged Syria to put an end to "flagrant violations of international law."
The U.S.-led Western military alliance held an urgent late night meeting in Brussels to discuss the matter and in New York, Turkey asked the U.N. Security Council to take the "necessary action" to stop Syrian aggression.
U.N. diplomats said Security Council members hoped it would issue a non-binding statement on Thursday that would condemn the mortar attack "in the strongest terms" and demand an end to violations of Turkey's territorial sovereignty.
Some 30,000 people have been killed across Syria, activists say, in a conflict with growing sectarian overtones which threatens to draw in regional Sunni Muslim and Shi'ite powers.
Turkey is sheltering more than 90,000 refugees from Syria and fears a mass influx similar to the flight of half a million Iraqi Kurds into Turkey after the 1991 Gulf War.
Violence inside Syria intensified on Wednesday with three suicide car bombs and a mortar barrage ripping through a government-controlled district of Aleppo housing a military officers' club, killing 48 people, according to activists.