AMMAN/BEIRUT (Reuters) -- Turkey warned Kurdish militia fighters in northern Syria on Monday they would face the "harshest reaction" if they tried to capture a town near the Turkish border, and accused Russia of a missile attack there that killed at least 14 civilians.
A major offensive supported by Russian bombing and Iranian-backed Shi'ite militias has brought the Syrian army to within 25 km (15 miles) of Turkey's border. The Kurdish YPG militia has exploited the situation, seizing ground from Syrian rebels to extend its presence along the frontier.
At least 14 civilians were killed in the Syrian town of Azaz, the last rebel stronghold before the border with Turkey, when missiles hit a children's hospital and a school sheltering refugees fleeing the Syrian army offensive, a medic and two residents said.
Turkish Prime Minister Ahmet Davutoglu said a Russian missile had hit the buildings and that many civilians including children had been killed.
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Turkey shelled YPG positions for a third day to try to stop its fighters seizing Azaz, just 8 km (5 miles) from the border. Ankara fears the Kurdish militia, backed by Russia, is trying to secure the last stretch of around 100 km (60 miles) along the Syrian border not already under its control.
"We will not allow Azaz to fall," Davutoglu told reporters on his plane on the way to Ukraine, adding YPG fighters would already have taken Azaz and Tal Rifaat further south had it not been for Turkish artillery firing at them over the weekend.
"If they approach again they will see the harshest reaction," he said.
The standoff has increased the risk of direct confrontation between Russia and NATO member Turkey.
Turkey is enraged by the expansion of Kurdish influence in northern Syria, fearing it will encourage separatist ambitions among its own Kurds. It considers the YPG a terrorist group.
Davutoglu said Turkey would make the Menagh air base north of the city of Aleppo "unusable" if the YPG, which seized it over the weekend from Syrian insurgents, did not withdraw. He warned the YPG not to move east of the Afrin region or west of the Euphrates River, long a "red line" for Ankara.
Syria's rebels, some backed by the United States, Turkey and their allies, say the YPG is fighting with the Syrian military and its backers, including Russia, against them in the five-year-old civil war. The YPG denies this.
South of Azaz, the Kurdish-backed Syria Democratic Forces (SDF) alliance, of which the YPG is a member, took around 70 percent of the town of Tal Rifaat, according to the Syrian Observatory, which monitors the war.
Major powers agreed in Munich on Friday to a cessation of hostilities in Syria, but the deal does not take effect until the end of this week and was not signed by any warring parties.
At a press conference in Kiev, Davutoglu doubted Russia's commitment to any such deal, pointing to comments from Moscow that it would continue its air strikes regardless. Russia, Davutoglu said, had a clear objective:
"They want to have just two options in front of the international community: Daesh or Assad," he said, using an Arabic acronym for Islamic State.
Tens of thousands have fled to Azaz from towns and villages where there is heavy fighting between the Syrian army and militias.
"We have been moving scores of screaming children from the hospital," said medic Juma Rahal, following the missile strikes. At least two children were killed and ambulances ferried scores of injured people to Turkey for treatment, he said.
French charity Doctors Without Borders/Médecins Sans Frontières (MSF) meanwhile said seven people were killed and at least eight staff were missing after missiles hit a hospital in the province of Idlib, west of Aleppo, in a separate incident.
"The author of the strike is clearly ... either the government or Russia," MSF president Mego Terzian said.
Russian Health Minister Veronika Skvortsova said Russian air strikes were targeting Islamic State infrastructure and she had no reason to believe that Russian planes had bombed civilian sites in Idlib.
"We are confident that (there is) no way could it be done by our defense forces. This contradicts our ideology," she said in Geneva.
Syria's ambassador to Russia meanwhile said U.S. war planes were responsible.
"Concerning the hospital which was destroyed, in actual fact it was destroyed by the American Air Force. The Russian Air Force has nothing to do it with," Ambassador Riad Haddad told Rossiya 24 television.
GROUND INCURSION NOT PLANNED
Ankara views the YPG as an extension of the Kurdistan Workers Party (PKK), which has fought a 31-year-old insurgency for autonomy in southeast Turkey. But Washington, which does not see the YPG as terrorists, supports the group in the fight against Islamic State in Syria.
That has left Turkey dangerously exposed, unable to count on the support of its NATO allies as it campaigns against the YPG, but also threatened by Islamic State fighters, as well as Syrian government forces and their backers including Russia.
Turkish financial markets were weaker on Monday on fears about the situation on the border, with the lira underperforming emerging markets currencies, its dollar bonds selling off heavily, and its default insurance costs rising.
Turkish Defence Minister Ismet Yilmaz denied a report that some Turkish soldiers had entered Syria at the weekend and said Ankara was not considering sending troops there, according to the state-run Anadolu Agency.
The Syrian government had said Turkish forces were believed to be among 100 gunmen who entered Syria on Saturday.
Yilmaz also denied reports that Saudi Arabian aircraft had already arrived at Turkey's Incirlik air base to join the fight against Islamic State, but said a decision had been reached for Saudi to send four F-16 jets.