* Party congress to set agenda for next decade
* Erdogan seen tightening grip
* Regional leaders expected to attend
By Nick Tattersall and Can Sezer
KONYA, Turkey, Sept 26 (Reuters) - Surveying the street lights sparkling like jewels on the plain below, Tahir Akyurek looks back with satisfaction on his first eight years as mayor of this central Turkish city.
Two-lane highways have been widened to six, a fast train line has put Ankara just an hour and a half away, and there is a new park where students and the elderly chat over tea or wander among pristine lawns in the shadow of elegant minarets.
More so than the teeming streets of cosmopolitan Istanbul, the ordered avenues of Ankara or the resorts of the Aegean and Mediterranean coasts, this conservative industrial city on the Anatolian plateau epitomises the reformist ambitions of Turkey's ruling Justice and Development (AK) Party.
"Konya is connected with its traditions and embraces the new ... Being conservative, being devoted to tradition, does not mean being reactionary," Akyurek told Reuters, sipping tea and chewing almonds on a cafe terrace overlooking the city.
His sentiments reflect the self-image of the Islamist-rooted AK Party as it prepares for its biggest overhaul since sweeping to power in Turkey a decade ago. Critics are less charitable, viewing it as a threat to the modern secular republic founded by Kemal Ataturk on the ruins of the Ottoman Empire 90 years ago.
The party's Sept. 30 congress is unlikely to offer any sign Prime Minister Tayyip Erdogan, viewed by many Turks as their strongest leader since Ataturk, is loosening his grip on a heavily-centralised party or on the country as a whole. AK, its initials spelling out the word for purity, is Erdogan's child.
New members of the party's administrative body will be picked to steer it through an election cycle beginning next year, but Erdogan will make sure those close to him remain in charge, helping smooth his way to an expected bid for a newly-constituted executive presidency in 2014.
"The importance of this convention is that it will determine the people who will be at the core of the party after Erdogan becomes president," said Koray Caliskan, associate political science professor at the Bosphorus University and a columnist for the liberal daily Radikal.
"He will want the leader to obey him but at the same time to balance different opinions in the party."
Erdogan created the AK Party as Turkey slid into a financial crisis in 2001, rallying around himself an array of centre-right democrats and nationalists as well as religious conservatives. The party swept to its first victory a year later as an angry populace rejected long established parties tainted by corruption, personal rivalries and economic mismanagement.
The past decade has seen per capita income nearly triple and re-established Turkey as a regional power, with Western nations seeing its mix of democratic stability and Islamic culture as a potential role model in a volatile region.
It has been Turkey's longest period of single-party government for more than half a century, ending a history of fragile coalition governments punctuated by military coups.
But while he may be a towering figure of Turkish politics with three successive landslide victories, Erdogan's autocratic style makes him loved and loathed with equal passion.
Hundreds of politicians, academics and journalists are on trial as part of a five-year investigation into an alleged secularist network known as "Ergenekon", accused of plotting against the government. More than 300 army officers were handed long jail terms last Friday for an alleged plot to topple Erdogan almost a decade ago.
"Democracy is not making progress in this country. It is regressing in terms of the separation of powers, the independence of the judiciary and freedom of expression," said Faruk Logoglu, vice chairman of the main opposition Republican People's Party (CHP).
"(Erdogan's) primary aim will be to conduct a congress that will navigate him to the presidency and to a new constitution which he hopes will be of his making and design."
The CHP, the party of Ataturk, has struggled to mount any effective opposition to AK, in parliament or on the streets. Some observers contend that the only real threat to the party might come when Erdogan relinquishes power. Without him, they say, it could dissolve into the many and disparate political parts from which he forged it.
Party officials expect as many as 30,000 people at the convention in a sports arena in Ankara. Egypt's Islamist President Mohamed Mursi, who was swept to power last year after a popular uprising, is among the regional leaders invited.
Erdogan, a devout Muslim who once served a brief prison sentence for religious incitement, championed the pro-democracy uprisings of the "Arab Spring", which saw decades-old dictatorships unseated in Tunisia, Libya and Egypt.
"There was great interest in Prime Minister Erdogan when he visited Egypt and Libya," said Idris Bal, an AK Party deputy and member of parliament's foreign affairs commission, when asked about Mursi's invitation.
"The main attraction of our party is that it is not based on religious or ethnic nationalism," Bal said.
But after a decade in power, Erdogan has failed to bring about much hope of an end to a 28-year-old war with Kurdish militants in Turkey's mountainous southeastern border region with Iraq, a topic likely to be high on Sunday's agenda.
The government has broken taboos with some reforms such as authorising Kurdish language teaching and broadcasting. But recent fighting with the Kurdistan Workers Party (PKK) - considered a terrorist organisation by Ankara, the United States and European Union - has been some of the heaviest since it took up arms in 1984 with the aim of carving out a Kurdish state.
Thousands of pro-Kurdish trade unionists, politicians, academics and journalists have been detained since 2009, accused of links with the PKK.
Masoud Barzani, president of Iraq's autonomous Kurdistan region, has been invited to the party congress, as has Iraqi Prime Minister Nuri al-Maliki, whose Shi'ite-led government in Baghdad has been irritated by Ankara's courting of Iraqi Kurds.
Senior figures from smaller rival parties look set to be given roles in the AK Party administration as part of the overhaul, a bid to consolidate its support base for the coming electoral cycle.
Numan Kurtulmus, head of the former Islamist-rooted HAS Party, and Suleyman Soylu, one-time leader of the conservative Democratic Party, have joined the AK Party in recent weeks and could be rewarded with senior administrative roles.
"What they are trying to say is we want to agree with everyone on the political right and centre, we are taking them into our ranks. The prime minister's initiative is trying to portray the party as inclusive," said Tarhan Erdem, the head of Turkish polling company Konda.
"(The congress) is a major turning point for the AK Party. But it will not be a turning point because of ideas put forth by party members ... New policies will be formed and implemented by the party leader. That is all there is to it. One shouldn't see this as a part of democratic activity," he said.
Erdogan's taming of the military, self-appointed guardians of Turkish secularism, has fuelled suspicions in Western-facing cities like Istanbul and other coastal towns that the AK Party has a hidden agenda of creeping Islamic conservatism.
Some disdain the appearance of the Islamic headscarf in public institutions, something banned since the foundation of secular Turkey nine decades ago. Revellers complained tighter alcohol restrictions meant there was little other than drinking yoghurt or soda on offer at a recent Madonna concert in Istanbul, seeing it as another sign of diminishing freedoms.
But in the bars, restaurants and clubs of the historic Beyoglu district there are few such signs. Thousands of tourists and locals party into the small hours, spilling out into the narrow back streets to a soundtrack of thumping dance music.
Mayor Akyurek's conservative Konya can seem a world away.
Here, few restaurants serve alcohol, the Islamic headscarf is more in evidence, and the tourists are descending on the tomb of Rumi, a widely-read 13th century Sufi mystic who founded the order of the Whirling Dervishes.
Konya is one of the "Anatolian Tigers", cities whose industries and small businesses have thrived over the past decade of AK Party rule and whose electorate can be counted on to deliver solid support for the status quo.
There is little fear of creeping conservatism here. Talk of an AK Islamist agenda is rarely heard and eyes, rather than turning inward, look to export markets beyond Anatolia, in the Middle East and Europe.
"Turkey, like Konya, is devoted to its traditions but also open to the rest of the world," said Akyurek, who won a second term in 2009 with one of the highest majorities ever recorded in a Turkish local election.