Turkish Prime Minister Tayyip Erdogan said on Sunday authorities had "largely" reached agreement on the appointment of new military commanders, defusing a row between the government and top army brass.

Erdogan told reporters after a rally in the central Turkish town of Afyonkarahisar that a decree on the appointments would be submitted to President Abdullah Gul for his approval later on Sunday.

Financial markets declined last week after the annual Supreme Military Council, chaired by Erdogan but dominated by generals, failed to fill the two top jobs after a four-day meeting that ended on August 4.

The promotions process in the secular military was thrown in disarray by investigations into various alleged plots by officers to topple Erdogan's ruling AK Party.