SILIVRI, Turkey – Two retired Turkish generals went on trial on Monday in a group of 56 people accused of planning a coup in a case that highlights a power struggle over Islam's role in the European Union candidate country.

They join 86 others already being tried for their links to a shadowy right-wing group accused of plotting a campaign of bombings and assassinations, in order to force the army to step in against Prime Minister Tayyip Erdogan's government.

The plot by the Ergenekon group is one of several factors that has strained relations between the government, which has its roots in political Islam, and the armed forces, who see themselves as guardians of Turkey's secular principles.

The two-year-old case, in which almost 200 people including retired and active army officers, lawyers and journalists have been charged, has hurt financial markets and divided public opinion in predominantly Muslim but officially secular Turkey.

Supporters say the case is a watershed moment in the waning influence of NATO member Turkey's powerful military, which has a long history of interfering in politics.

Critics say the AK Party, which ended the secularists' decades-long grip on power in 2002, is cajoling the judiciary to punish opponents in its attempt to take over state institutions.

Among the 56 people who went on trial on Monday at Silivri prison near Istanbul are two four-star generals -- the highest-ranking officers charged in Turkey's modern history.

They are retired general Sener Eruygur, a former commander of the paramilitary gendarmerie forces, and retired general Hursit Tolon, a former army commander.

Both are charged with masterminding a terrorist group and inciting armed rebellion against the government. Prosecutors are seeking life imprisonment for the two.

Tolon, wearing a business suit and looking relaxed, answered questions in the new custom-built courtroom at the prison outside Istanbul. Eruygur, in poor health, was not present.

Turkish stocks and lira made gains on positive news on the U.S. economy, but traders are closely following the case.

SECULAR ELITE

Many in Turkey's secularist elite, including generals, judges and professors, fear the AK Party is trying to undermine the secular principles established by founder Ataturk by introducing Islam into public life. The party denies this.

Hundreds of protesters demonstrated outside the courtroom, waving Turkish flags and chanting: The patriots are in prison.

Journalist Tuncay Ozkan, a defendant and a government critic, told judges he was being tried for political reasons.

I'm being held for my love for Ataturk, Ozkan told the court during a heated exchange with prosecutors.

The once-untouchable military -- which has unseated four elected governments, either in outright coups or by political pressure -- has found its influence waning as the government pushes reforms aimed at meeting EU membership criteria.

It has denied any links to Ergenekon.

The probe has been welcomed by pro-democracy advocates as a chance to root out deep state elements in the civil service who have been trying to destabilize the government.

This kind of case has never been seen before in Turkey, said Akin Atal, an independent lawyer. Such alleged claims of unity between the state and the mafia being on trial is unheard of.

But as the police round up journalists, human rights activists, artists and academics in a ever-expanding case, some question whether the AK Party is misusing the judiciary, once a bastion of the secularist elite, to punish political opponents.

Many of these accuse the AK Party of seeking revenge for an attempt to ban it in court last year, something it denies.

(Writing by Ibon Villelabeitia; Editing by Richard Balmforth)

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