ANKARA – A Turkish court ruled on Monday that President Abdullah Gul should stand trial for a fraud case dating to the late 1990s, a move that will highlight tension between the ruling Islamist-rooted party and a conservative secularist establishment.

As president, Gul enjoys immunity. But the pursuance of a case against him, even if it collapses, could help fuel further unease in a wary secularist middle class that acquiesced to the AK Party in 2002 after the collapse of traditional parties amid corruption allegations and economic failures.

Political passions are already running high in the EU candidate country over an investigation into a right-wing group accused of plotting to overthrow AK Prime Minister Tayyip Erdogan. Some secularists see it as part of a strategy to break the power of military and courts and promote Islamist rule.

Traders said the news briefly reversed a buying trend in the Turkish market, fuelling sales in Turkish bonds.

An Ankara prosecutor had ruled the case should be dropped, but the Ankara court ruled Gul should stand trial. A court of appeals now will have the final say on the case.

Turkey's secularist establishment has used the courts in the past against the AK Party, which ended the traditional parties' decades-old grip on power when it swept to government with a huge majority in 2002. A failed 2008 court attempt to close the AK Party plunged Turkey into political chaos and hurt markets.

Secularists accuse the AK Party, which embraces center- right elements and nationalists as well as religious conservatives, of violating Turkey's secular principles and of harboring an Islamist agenda. The AK Party denies this and points to economic successes and liberal political and economic reforms aimed at bringing Turkey into the European Union.

E-COUP

It is the rule in the Turkish Republic's constitution and laws that everyone should stand trial, the court ruled.

Gul, a founder of the AK Party, was chosen as president by parliament in 2007 despite a declaration by the military, posted on its website, suggesting his election could undermine the country's secularist order.

The army has removed four governments from office in coup models ranging from outright armed overthrow in 1960 to a campaign of political pressure in 1997. AK-led reforms have cut the generals' formal powers, in line with EU demands, but the failed website intervention was dubbed by many the e-coup.

Gul,like Erdogan, denies any Islamist ambitions. He is highly regarded in Europe where, as foreign minister, he steered the country into membership negotiations.

The fraud case dates back to the late 1990s, when the Welfare Party, a predecessor to the AK Party, was accused of misappropriating funds from the Treasury.

Gul's office was not immediately available for comment.

Parliament speaker Koksal Toptan said that under the constitution the president can be tried only for treason.

Former Prime Minister Necmettin Erbakan, who was ousted by the military in 1997 on accusations he pursued an Islamist agenda, was found guilty five years ago for the same fraud case.

Gul, who served as minister under Erbakan with the Islamist Welfare Party, pardoned Erbakan last year.

Tensions between the government and its secularist enemies have risen during an investigation into the 'Ergenekon' group accused of trying to engineer a military coup. Nearly 200 people, including retired generals and lawyers are on trial for their links to Ergenekon, which prosecutors say was planning a campaign of bombings and assassinations to sow chaos.

Critics say Ergenekon is revenge for the 2008 court case to close the AK Party. The government denies the Ergenekon case is politically motivated and defends the judiciary's independence.

On Sunday, thousands of anti-government protesters marched in Ankara against what they said were attempts by Erdogan to violate the country's secular principles. Protesters were also marching against record unemployment.