Turkish Constitutional Court convened on Monday to decide on the closure case filed against the ruling Justice & Development (AK) Party.
Court board will come together every day until they reach a decision.
Chief prosecutor Abdurrahman Yalcinkaya asked the Constitutional Court in March to shut down Prime Minister Recep Tayyip Erdogan's AK Party and ban him and 70 other party members from politics for five years.
Turkey's politicians, the European Union and foreign investors are anxiously awaiting a verdict in the AK Party case which has drawn Turkey into a period of political uncertainty, hurting financial markets and slowing its reform process.
The lira weakened in early trade ahead of the court session, which began at 9:35 a.m. (0635 GMT) according to state-run Anatolian news agency.
Closure of the party would almost certainly lead to an early election, possibly in November, and deal a further blow to Turkey's hopes of joining the EU.
The court agreed in March to take up the case seeking to close the party and ban Prime Minister Tayyip Erdogan, President Abdullah Gul and 69 major AK Party officials from party membership for five years. The party rejects the charges.
Most analysts, who expect a verdict by early August, still think party closure is the most likely scenario, despite growing speculation that it could escape a ban. Turkey's battered stock market has rebounded this month on the prospect it will avoid closure.
The court could dismiss the case, impose a fine, or ban the party and some of its leaders. In order to close the party, seven of the 11 judges must vote in favour of such a move.
The court can also rule to deprive the AK Party of financial assistance of the Treasury instead of its dissolution.
In Sunday's second instalment of an interview with Hurriyet newspaper, Erdogan rejected suggestions that he would adopt a more dictatorial style if the AK Party survives closure.
"God willing there will be a beneficial verdict for our country. What I can say is that it is impossible for me to ever behave with hate or enmity towards my people," Erdogan said.
He acknowledged for the first time in the interview that the party made mistakes which contributed to the current crisis.
If the court bans the party, the government will dissolve and the remaining AK Party deputies will become independent MPs who will be allowed to form a new party or join an existing one.
The divisions grew in January when the government moved to lift a ban on university students wearing Islamic headscarves. The Constitutional Court annulled that reform in June.
Commentators say the most likely scenario would then be an early parliamentary election, possibly as soon as November.
Shutting such a popular party, which won almost half the vote in a parliamentary election a year ago, would be politically difficult and harm Turkey's EU accession process.
Erdogan would likely seek to regain the office of prime minister as an independent candidate in an election - a potential source of fresh tension between the two camps.
Last Mod: 28 Temmuz 2008, 12:11