The current mandate, which allows the military to conduct cross-border air and ground assaults against the armed militant branch of the Kurdistan Workers' Party (PKK), expires Oct. 17.
Lawmakers voted 511-18 to approve the extension.
Turkey has launched several military raids this year against Kurdish guerillas in northern Iraq, where they are believed to be staging attacks against soldiers in the southeastern part of Turkey.
The ambush Friday that killed 17 Turkish troops was on a military outpost near Semdinli along the Iraq border. The military reportedly said 23 rebels were killed in the fighting that ensued.
Days later, Turkish jets bombed suspected Kurdish rebel targets in the Avasin Baysan area of Iraq and two mountainous regions in southeastern Turkey, reported the BBC.
More than 40,000 people have died in clashes since the PKK launched a separatist movement in 1984.
The issue of how to deal with the PKK has plagued Turkey for decades. The group has a political arm called the Democratic Society Party, along with several other organizations, newspapers, and satellite television and radio stations.
"Traditionally, this has been one of the big, transcendent issues in Turkish social and political life since the founding of the republic: How do you handle this large, population of people who speak a different language but are Turkish citizens," said Mark Parris, U.S. ambassador to Turkey from 1997 to 2000.
The issue receded after PKK's leader Abdullah Ocalan was arrested in Kenya in 1999, followed by a cease-fire. But as the violence resumed and casualties mounted over the past few years, battling the PKK has returned to the forefront of Turkey's domestic agenda, Parris said.
Kurdish people make up about 20 percent, or 14 million, of Turkey's population. Many live in major cities such as Istanbul or in the southeastern part of the country. As part of the effort to clamp down on rebellions, which dates back to the 1920s, and assimilate Kurds into the general population, Turkey imposed restrictions on use of the Kurdish language. Some of these restrictions remain today, for example, street signs in the southeastern city of Diyarbakir must be written in Turkish and Kurdish-language broadcasting is limited to 45 minutes per day.
As part of the process of becoming a candidate member of the European Union, Turkey has gradually removed some restrictions on the Kurdish language and allows some degree of education in the Kurdish mother tongue, Parris said.Another factor helping the government make progress in terms of lowering the level of violence and depriving the PKK of new recruits is that the Turkish economy has been in a boom since 2002, providing more resources to help the region. However, the current economic crisis is going to limit what the government can do in non-military ways to deal with the matter, he cautioned.