Turkey's top court is beginning hearings in a case that seeks to ban the ruling party for allegedly trying to undermine secularism.
The Justice and Development (AK) party has its roots in political Islam, but its leaders deny it has an Islamist agenda.
Opponents -- who see themselves as guardians of Turkey's secularism -- say the ruling party is trying to establish an Islamic state, and they want it shut down.
Chief Prosecutor Abdurrahman Yalcinkaya presented arguments in the case before judges in a closed-door hearing on July 1. He wants the party closed over charges of antisecular activities and 71 leading figures, including Prime Minister Recep Tayyip Erdogan and President Abdullah Gul, banned from belonging to a party for five years.
In his indictment, Yalcinkaya said the secular republic faced an "unprecedented danger" because "counterrevolutionary forces are no longer in the margins, but in government."
A ruling to close the party would trigger the fall of the government and leave Erdogan's political future in doubt.
And already, the case has weighed on Turkey's economy, prompting a fall in the stock market and making foreign investors more wary.
"The main problem is the possible impact on the economy," says Lale Sariibrahimoglu, a columnist with the English-language newspaper "Today's Zaman." "[It] has already been inflicting some damage on the economic situation because of the ongoing instablity and uncertainty in the country, because of the unknown result. There are many unknowns, such as what the constitutional court will decide about the AK party, how the staunchly secular Turkish establishment, secular elite, will react to it."
The case is the latest round in a long-running battle between the pro-European ruling party and Turkey's secular elite and military establishment.
Last year, the constitutional court blocked the party's attempt to have its candidate, Gul, elected president, after the move prompted large-scale protests by secularists. Snap elections followed, won by the AK party, and Gul was eventually elected by the new parliament.
Then earlier this year, parliament voted to lift a ban on Muslim head scarves for university students.
The constitutional court last month struck down that government-backed amendment, saying it was contrary to secularism.
That amendment is now being cited as a key piece of evidence in the case seeking the AK party's closure.
The party has dismissed it as politicallly motivated, and it's caused concern further afield.
This was evident in a resolution adopted last week by the Parliamentary Assembly of the Council of Europe. It said that the case, regardless of its outcome, "is seriously affecting political stability in the country, as well as the democratic functioning of state institutions and delays urgent economic and political reforms."
The worry is the case could influence Turkey's negotiations to join the European Union.
'It's Not Normal'
In April, European Commission chief Jose Manuel Barroso said it could have a "major impact" on the way Turkey is seen by the EU.
"It's not normal that the party that was chosen by the majority of the Turkish people is under this kind of investigation, and that main figures of the state are also under this investigation," Barroso said. "I hope the constitutional court will take a decision based on the principles of law, based on democracy, and the respect for the standards that we have in Europe."
The defense gets its say on July 3, and a verdict in the case is not seen as likely until August.
If the court rules to close the party, more early elections are likely.
AK members could also form a new party, and Erdogan could possibly be re-elected to parliament as an independent.
And AK members could also form a new party, with decent chances of success, says Sariibrahimoglu.
"The AK party, or the new party to be formed out of the ruins of this party in the case of a closure, seems to have a high chance of winning another election, perhaps with a majority," she says. "Because the current trends have shown us that people of this country and the secular elite differ in their opinions on how the country should be ruled."
But a closure ruling would bestow on the AK party a dubious distinction -- to be the first party to be shut while in government.