* Some 100 PKK fighters to leave Turkey to boost confidence
* Talks with rebel group being held in northern Iraq
* PM Erdogan under pressure to act swiftly as elections loom
* More than 40,000 people killed in conflict since 1984 (Adds quotes, details, background)
By Daren Butler
ISTANBUL, Jan 29 (Reuters) - Kurdish militants will halt hostilities with Turkey in February according to the timetable of a fledgling peace process aimed at ending 28 years of insurgency, a report in a mainstream newspaper said on Tuesday.
As an initial confidence-building step, around 100 fighters from the Kurdistan Workers Party (PKK) guerrilla group will hand in their weapons and leave Turkey, the Hurriyet said.
Turkish intelligence officials began talks with jailed PKK leader Abdullah Ocalan in late 2012 and preliminary talks have also been held with PKK members in northern Iraq, where most of the group's several thousand militants are based, it said.
More than 40,000 people have been killed in fighting since the rebels took up arms in 1984 with the aim of carving out a Kurdish state in southeastern Turkey. The PKK, designated a terrorist group by Ankara, the United States and European Union, has since moderated its goal to one of autonomy.
The conflict is the chief domestic problem facing Prime Minister Tayyip Erdogan after 10 years in power.
"According to the timetable on the table, the PKK will announce its decision to halt hostilities in February right after an official call by Abdullah Ocalan," the paper said.
Hurriyet, which is regarded as authoritiative on security-related matters, did not identify its sources and there was no immediate comment from Turkish officials or the PKK.
The militants have announced unilateral ceasefires in the past but these have been ignored by Turkish security forces.
Under a framework discussed with Ocalan, all PKK fighters will eventually disarm after the withdrawal from Turkey and in return the government will improve the rights of Kurds, who make up some 20 percent of Turkey's population of 76 million.
As part of those reforms, Turkey's parliament last week passed a law allowing defendants to use Kurdish in court in a move seen aimed at breaking a deadlock in trials of hundreds accused of links to the PKK.
Only Erdogan and a few officials are believed to have first-hand knowledge of the peace framework. They have not disclosed details of the plan, nor have they denied reports on it by media close to the government.
With next year's local and presidential elections in mind, Erdogan has limited time and is keen to keep the process under wraps due to fears of a nationalist backlash against talks with a group reviled by most Turks.
A more senior delegation from the MIT national intelligence agency, possibly including its head - Hakan Fidan, was due to travel to Arbil in northern Iraq for more talks with the PKK in the coming week, the liberal Radikal daily reported.
Among those expected to take part in those talks was Sabri Ok, a senior figure in the PKK who had also participated in peace talks in Oslo. Those negotiations unravelled in 2011 when recordings of them were leaked to Turkish media.
The planned withdrawal of PKK fighters from Turkish territory is expected to be monitored by representatives of non-governmental organisations.
The militants previously withdrew from Turkish territory on Ocalan's orders after his capture in 1999, as part of moves towards peace. However, several hundred militants are estimated to have been killed by security forces during that withdrawal.
In an apparent bid to ease PKK concerns that the same would happen this time, Erdogan promised this month that it would not. (Editing by Louise Ireland and Jonathon Burch)