Recep Tayyip Erdogan, the Turkish Prime Minister, has appealed for national unity in a television address tonight. The speech was recorded on Saturday, a day after the army threatened to intervene in the presidential poll process.

The Turkish stock market plunged 8 per cent this morning and the Turkish lira lost 4 per cent of its value in response to the political tensions gripping the country.

The prospect of an Islamist becoming president of the traditionally secularist nation has sent up to a million Turks out to protest on the streets of Istanbul, and alarmed the country's military enough to issue a warning that it is "the absolute defender of secularism".

It has also shaken the financial markets, unnerving the foreign investers who have returned to Turkey as it rebuilt its economy after the crash of 2001.

"We are carefully watching market developments. The economic system is strong," said Abdullatif Sener, the Minister of State for the Economy and Deputy Prime Minister.

In his televised address to the nation, Mr Erdogan said: “Unity, togetherness, solidarity, these are the things we need most. We can overcome many problems so long as we treat each other with love”. He made no direct reference to the political standoff, but said: “Turkey is growing and developing very fast ... We must protect this atmosphere of stability and tranquility,”

The crisis began on Friday when Abdullah Gul, the Foreign Minister, won the inconclusive first round of voting in the Turkish parliament for the post of president, taking 357 votes.

Mr Gul is a moderate from the senior ranks of the ruling Justice and Development Party (AK), the Islamist party that came to power in Turkey at the last general election. Popular and hard-working, he is nonetheless a former member of a banned Islamist organisation, and has a wife who covers her head in the Islamic manner banned in Turkey.

The prospect of Mr Gul becoming the country's figurehead prompted the opposition to mount a legal challenge to Friday's vote, claiming that it was unconstitutional as fewer than 367 MPs, or two thirds of all members, were present for the vote.

Bulent Arinc, the speaker of the house, also a member of AK, disagreed, saying that a quorum of 184 - one third of the 550 member assembly — was enough.

Turkey's generally secularist Constitutional Court was meeting this morning to rule on the appeal. Tulay Tugcu, the president of the Constitutional Court, said that she hoped to announce its ruling before the next round of voting in the presidential election is due to take place on Wednesday, May 2.

Meanwhile the political standoff gained a dangerous extra dimension on Friday night when the army issued its own statement. “The Turkish Armed Forces have been monitoring the situation with concern,” the state-run Anatolia agency quoted the military as saying.

“It should not be forgotten that the Turkish Armed Forces is one of the sides in this debate and the absolute defender of secularism.”

The powerful Turkish military has intervened in government four times since the 1960s.

Yesterday secularists took to the streets in force to voice their fears that AK was preparing to turn Turkey into an Islamic state by stealth. The demonstrators carried blood-red national flags and posters of Kemal Ataturk, the founder of a secular Turkey. Banners read: "Sharia shall not rise to the Presidential Palace."

Mr Gul is the only candidate in the presidential race. His appointment would be a symbolic victory over the staunchly secularist elite that runs the country and traditionally controls the office of head of state. He would be the first incumbent with a wife who covers her head.

The headscarf is banned in public offices, parliament and universities in Turkey under rules much harsher than in most of Christian Europe.

Yesterday Mr Gul asserted that he would not withdraw his candidacy under any circumstances. "We all need to wait for the decision of the Constitutional Court," he said.

If the court rules against the opposition, the second round of voting on Wednesday is likely once again to be inconclusive. But he is certain to be elected in the third round, a week later on May 9, as the number of votes he will need will then drop to a simple majority of 276.

If the court backs the opposition's appeal, early general elections will become more likely. Mr Sener said today that no decision had been taken on whether to call a poll.

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