New Turkish President Abdullah Gul approved a pro-EU reformist cabinet on Wednesday which reflected Prime Minister Tayyip Erdogan's aim to push ahead with stalled political and economic reforms needed to join the bloc.

Gul, who as foreign minister helped Turkey win EU accession talks status in 2005, is the first politician with a background in political Islam to become president in mainly Muslim but constitutionally secular Turkey, over the army's opposition.

After meeting Gul at the presidential palace, Erdogan named Ali Babacan as Gul's successor as foreign minister. Babacan will remain in his role as chief negotiator in the membership talks.

Kemal Unakitan remains in the post of finance minister, while former banker Nazim Ekren was named minister in charge of coordinating economic issues, an important position as the government pushes for further economic reforms.

"I prepared the new cabinet as a team who have the skills to realise our goals for the coming period ... I believe we formed a strong team," Erdogan told reporters.

The ruling AK Party won a sweeping victory in parliamentary polls in July but was unable to form a new government because of objections by Gul's secularist predecessor Ahmet Necdet Sezer.

Turks will closely follow the military's reaction to Gul after its top brass snubbed his swearing-in ceremony on Tuesday. The military elite fears his presidency will lead to a creeping subversion of the secular order.

Turkey's military considers itself the ultimate guardian of the secular republic founded by Mustafa Kemal Ataturk and has ousted four governments in the past 60 years. Its last such move was as recently as 1997, against a government it considered too Islamist, in which Gul was a minister.


END OF CRISIS?

Buyukanit rattled markets on Monday when he warned that he saw "centres of evil" seeking to undermine the secular republic, a statement suggesting the army would not stand on the sidelines if it saw the separation of religion and state threatened.

"I want to say on this meaningful day that we need to unite around the values of our nation, qualities of our republic and common goals more than ever and put aside our differences," Erdogan said earlier to mark Aug. 30 Victory Day celebrations.

Many Turks hope months of political turmoil sparked by the standoff between the AK Party and the secular elite, including army generals, judges and politicians, has come to an end.

Gul pledged to uphold the secular system and Ataturk's principles in an inaugural speech seen as conciliatory.

"Turkey has taken a step towards normalisation. If we are to judge what sort of president Abdullah Gul is during his term in office, we can only measure it in terms of how faithful he is to this pledge," said Radikal newspaper editor Ismet Berkan.

The controversy about Gul is symbolised by his wife's Muslim headscarf, a garment banned in public offices and universities. Secularists see it undermining separation of state and religion.

"Gul is above all a compromiser," said Mehmet Ali Birand, a leading Turkish commentator.