SILIVRI, Turkey (Reuters) -- Two retired Turkish generals have gone on trial in a group of 56 people accused of plotting in a shadowy right-wing organization to overthrow Prime Minister Tayyip Erdogan's government.
They join 86 others already being tried for planning to carry out a campaign of bombings and assassinations, and force the army to step in against 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.
An alleged scheme by the military to discredit the ruling AK Party, and a new law that allows soldiers to be prosecuted in peacetime by civilian courts has added to tension.
The two-year-old case, in which almost 200 people including retired and active army officers, lawyers, journalists and politicians have been charged, has rattled financial markets in the European Union candidate country.
Among the 56 people who have gone on trial at Silivri prison near Istanbul are two four-star generals, for whom prosecutors are seeking life imprisonment.
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.
Tolon, wearing a business suit and looking relaxed, answered questions by the four-judge panel in the new custom-built courtroom at the prison outside Istanbul. Eruygur, reported to be in poor health, was not present.
Turkish stocks and lira made gains as improved corporate earnings in the United States boosted investor risk appetite, but traders are following the case for signs of political instability.
Many in Turkey's elite, including generals, judges and professors, fear the AK Party is trying to undermine its secular founding principles by introducing Islam -- the predominant religion -- into public life, something the party denies.
Hundreds of protesters demonstrated outside the courtroom, waving Turkish flags and chanting: "The patriots are in prison."
But 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.
Now on the defensive, it has denied any links to Ergenekon.
The case, which has dominated headlines in the local media, came to light two years ago when a cache of explosives was discovered in a house in Istanbul.
The investigation has been welcomed by pro-democracy advocates as a chance to break taboos on the military and 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 an 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.