ANKARA - Turkish Prime Minister Tayyip Erdogan's ruling AK Party won a parliamentary election with nearly 50 percent of the vote on Sunday, but failed to win enough seats to call a referendum on a planned new constitution.
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A Muslim democracy and candidate for the European Union, Turkey has become an economic powerhouse and influential player on the global stage since Erdogan's AK Party first swept to power in 2002.
The AK will be forced to compromise with other parties to press on with plans to replace the existing charter, written almost 30 years ago during a period of military rule.
"The people gave us a message to build the new constitution through consensus and negotiation," Erdogan said in a victory speech to supporters from the balcony of the AK Party headquarters in Ankara. "We will discuss the new constitution with opposition parties."
Advocating the spread of democracy in the region as the "Arab Spring" takes hold, Erdogan will now be under scrutiny over how he handles the hottest foreign policy issue of the moment, with thousands of Syrians fleeing to Turkey to escape a brutal crackdown by his friend President Bashar al-Assad.
Preliminary results based on 99.7 percent of the vote show AK winning 49.9 percent, or 325 seats, just below the 330 required for a plebiscite and less than the 331 of the 550 seats it had in the last parliament.
The slip will take some of the gloss off the AK success in winning a third consecutive term and four more years of single-party rule, but analysts reckoned it would be good for both the economy and democracy in Turkey.
"It seems the election outcome is heading toward the best-case scenario for the markets: a solid majority for AKP but short of the 330+ seats required to amend the constitution and put it to a referendum," said Wolfango Piccoli, an analyst at Eurasia Group risk consultancy in London.
The result boosted the lira currency in early Asian trade, and analysts expected to see further gains against the dollar.
"Falling short of 330 seats, the AKP would be forced to enter into negotiations with the opposition for the desired changes: a scenario that should help to limit the risk of further polarisation," Piccoli said.
AK supporters celebrated regardless, honking horns and waving flags as they drove around towns across the country.
The center-left Republican People's Party (CHP) took 25.9 percent of the vote while the far right Nationalist Movement Party (MHP) got 13 percent, exceeding the 10-percent threshold required for parties to enter parliament.
The election board will ratify official results in coming days.
Kemal Kilicdaroglu, who gave the CHP new direction when he took over leadership of the party last year, said it was the best showing by the party of Mustafa Kemal Ataturk, the founder of the Turkish republic, since a military coup in 1980.
"We wish all success to AKP, but they must remember there's a stronger main opposition party now," he told CHP supporters.Kurdish independents make strong showing
There were few reports of trouble during the vote, though there were some clashes afterwards in Diyarbakir, the main city in the restive Kurdish region, where a strong showing by independents fielded by the pro-Kurdish Peace and Democracy Party (BDP) played a big part in denying the AK's advance.
"Our people want the Kurdish issue to be solved through peaceful and democratic methods. We will work for it and will struggle to meet the demands of Kurdish people with the new constitution," Serafettin Elci, a prospective Kurdish MP for the southeastern city of Diyarbakir, told Reuters.
"This is a huge success for us. We expect the PM to signal a strong hope for the solution of the Kurdish problem for Turkey's future."
Erdogan's support has been built on his success in creating a booming economy and in ending decades of chaotic coalitions, military coups and failed international financial bailouts.
The only doubt hanging over Sunday's vote had been over the margin of Erdogan's victory, given aims for a new constitution.
There has been speculation that Erdogan will seek to move Turkey toward a more presidential system of government, with an ultimate aim of becoming president himself.
Erdogan, whose party evolved from banned Islamist movements, says the new charter will be based on democratic and pluralistic principles that will bring Turkey closer to EU standards.
Turkey and the Erdogan's AK are often cited as models for supporters of democracy living through the "Arab Spring" in parts of the Middle East and North Africa.
But while foreign investors traditionally have seen AK as the most market-friendly party, Erdogan's critics say he has an authoritarian streak.
Opponents point to rampant use of wiretaps by state agencies, the detention of journalists critical of the government, nepotism and a widening gap between rich and poor.
Analysts have warned the new government will face sobering economic challenges. The current account deficit is ballooning, fiscal policy needs tightening to cool overheating and youth unemployment is high in a country where the average age is 28.