Turkish presidential vote on Aug 20 - source

ANKARA, Aug 10 (Reuters) Turkey's newly re-elected parliament expects to start voting for a new president on Aug. 20, a ruling AK Party official said today, after the process was derailed in May by the country's powerful secular elite.

The official, who declined to be named, told Reuters the second round of voting was planned for Aug. 24 and a third and probably decisive round for Aug. 28. No official decision has yet been taken.

Financial markets are nervously watching the election, fearing that a decision by Foreign Minister Abdullah Gul to run could reignite political tensions.

Gul, an ex-Islamist and a key architect of Turkey's European Union membership bid, has signalled he will make a second bid for the top job despite stiff opposition from the secular elite, including army generals.

The secularists derailed a first attempt in parliament in May to have Gul elected president, forcing Prime Minister Tayyip Erdogan to call an early parliamentary election.

The Islamist-rooted AK Party won a sweeping victory on July 22 and now hold a majority of seats in parliament, sufficient to put their man into the presidential palace.

Gul is a controversial figure in Turkey, which is officially secular but predominantly Muslim, because of his Islamist past.

His wife wears the Islamic headscarf, seen by opponents as a provocative symbol.

Gul, a gently-spoken diplomat, denies any Islamist agenda.

A source close to Gul told Reuters the foreign minister was determined to run again.

The candidacy of Gul has split the AK Party. Some senior members want the party to use their sweeping re-election win to push through reforms and avoid getting bogged down in renewed clashes with secularists.

''(Gul's decisive attitude) will put Erdogan and the party into a difficult position. I wonder how skilfully Erdogan will manage to overcome this problem,'' said another senior AK Party member, also speaking on condition of anonymity.

The army ousted a government 10 years ago in which Gul served as a minister because it was deemed too Islamist.

The main opposition Republican People's Party, which helped scupper the previous attempt to elect Gul, has called on the AK Party to field a compromise candidate for head of state.

Defence Minister Vecdi Gonul, whose wife does not wear the headscarf, has been mentioned as one possible compromise.

In Turkey, the government holds most power but the president can veto laws, block appointments of officials and appoints judges. The president is also the army's commander-in-chief.

REUTERS RSA HT1832