Prime Minister Recep Tayyip Erdogan announced the decision in response to secularists' fears that his administration, by proposing a candidate for president with a background in the Islamic political movement, was moving the country toward Islamic rule that would undermine their Western way of life.

By holding early elections for a government with a fresh mandate, Erdogan hopes to resolve a crisis that sent the stock market tumbling and prompted the pro-secular military to threaten to intervene.

"God willing, Turkey will get back on track," Erdogan told reporters late Tuesday, referring to the economic and political stability that Turkey had enjoyed in recent years.

In a setback for his government, the country's highest court on Tuesday halted the parliamentary vote for president that looked set to elect the ruling party's candidate, Foreign Minister Abdullah Gul.

Acting on a protest from the opposition, the Constitutional Court ruled that there were not enough legislators present during the first round of voting on Friday, and cancelled the round. The opposition had boycotted the vote, depriving the ruling party of a quorum of two-thirds of lawmakers in the 550-seat Parliament.

Gul said he would not withdraw his candidacy despite the ruling and urged parliamentary elections to be held "as soon as possible."

At the heart of the conflict is a fear that Gul's party would use its control of both Parliament and the presidency to overcome opposition to moving Turkey toward Islamic rule. More than 700,000 pro-secular Turks demonstrated in Istanbul on Sunday, many of them women who believe political Islam would deprive them of personal freedoms and economic opportunities.