KEY POINTS:
ANKARA - Turkey's ruling AK Party has won a resounding election victory, giving the pro-business, Islamist-rooted party a mandate for reform but potentially setting the stage for renewed tensions with the secular elite.
The result will be a moral triumph for Prime Minister Tayyip Erdogan who called early parliamentary polls after losing a battle with the establishment, which includes army generals, over the appointment of the next head of state.
With two-thirds of the votes counted, the AK Party won 48 percent, almost half as much again as in 2002. But a more united opposition means it may end up with a similar number of seats, not enough to change a constitution that enshrines secularism.
Only two other, secularist parties crossed the 10 percent threshold to enter parliament - the nationalist-minded Republican People's Party (CHP) on 20 percent and the far-right National Movement Party (MHP) on 15 percent.
Some analysts said religion's role in modern Turkey - one of the Muslim world's few democracies which bridges Europe and the Middle East - played a smaller part than many had expected.
"The controversy which we witnessed about secularism versus Islam has not materialised," Sami Kohen, a columnist for liberal daily Milliyet, told Reuters.
"The message given by the electorate is that we are happy with economic progress and European (Union) policy," he said.
It was among the best results for any Turkish party in decades.
A senior AK Party lawmaker declared victory, saying it would win enough seats to form a single-party government for a second five-year term.
"It is clear that we will be in power alone and that Turkey's stability will continue," Salih Kapusuz told Reuters.
Economists said financial markets would welcome the results as they would give Erdogan a mandate to continue free-market policies and kick-start stalled EU membership talks.
"This is the best-case scenario for markets ... The question now is how is the establishment going to react and this is something the markets are going to be worried about," said analyst Simon Quijano-Evans, an analyst at CA-IB/UNICREDIT.
Electoral commission officials estimated turnout at around 80 percent in the large predominantly Muslim country of 74 million people, similar to the 2002 election.
Erdogan, 53, Turkey's most popular politician, called the poll early after the powerful secular elite stopped him appointing a fellow ex-Islamist whose wife also wears the Muslim headscarf, Foreign Minister Abdullah Gul, as president.
Secularists say the AK Party wants to undermine Turkey's strict separation of religion and state, and although the ruling party denies this, the warning struck a chord with some voters.
"The AKP is an Islamic party and I don't want them in power. They're very dangerous for Turkey, under the AKP Turkey's image will be ruined," said Kagan Razgirat, 24, a graphic designer who voted CHP in Istanbul.
The army views itself as the ultimate guarantor of Turkey's secular state. It has ousted four cabinets in the past 50 years, most recently an Islamist-minded predecessor of the AK Party in 1997.
"I don't think (the army) is happy but they're not going to roll the tanks out. They will explore means of making themselves felt, bearing in mind it's a government with a strong mandate," said Semih Idiz, a leading Turkish columnist.
Erdogan, who denies any Islamist agenda, has presided over strong economic growth and falling inflation since his party swept to power in 2002 on the back of a financial crisis.
"The AK Party has really helped the poor of this country. They distribute food, coal. They give money for our daughters to go to school," said Huseyin Yilmaz, 34, an unemployed man living in a shanty town on the edge of the capital Ankara.
Some independent, mostly pro-Kurdish candidates, are also tipped to win seats in the 550-member parliament.
Turkish security forces have been battling PKK Kurdish rebels since 1984 in a conflict that has cost more than 30,000 lives. Violent clashes have increased over the past year.
Turkey's next government will have to decide whether to send the army into northern Iraq to crush PKK rebels based there, a move that is increasingly worrying the United States.
Nationalists are also sceptical about Turkey's EU bid.
- REUTERS
