The "fierce artillery bombing" hit a resort in Zakho, a city on the border between Iraq's Kurdistan region and Turkey, state TV said.
Children were amongst the victims, including a 1-year-old, the Kurdish health minister said in a statement, adding that all the victims died before reaching a hospital.
The Turkish defence ministry said in a statement that two PKK militants had surrendered to a Turkish security point at the Habur border crossing with Iraq, which is about 10 km from Zakho, but made no mention of the attack. The ministry was not immediately available for comment.
The PKK took up arms against the Turkish state in 1984.
More than 40,000 people have been killed in the conflict, which in the past was mainly focused in southeast Turkey where the PKK sought to create an ethnic homeland.
The top United Nations envoy to Iraq condemned Wednesday's attack in a statement published on Twitter and called for an investigation to determine the circumstances surrounding the attack.