By Seda Sezer
IZMIR, Turkey (Reuters) - Watching Sebahattin Guney relax with a beer and a cigarette at a seafront cafe it is hard to understand why he feels under siege in his own country.
Like many in the Aegean city of Izmir, the 57-year-old sees Turkey's secularists fighting with their backs to the sea to stem the advance of Prime Minister Tayyip Erdogan's AK Party.
Pious Muslims, the AK's core voters in general elections on June 12, rail against this opposition bastion, saying Izmir is full of non-believers. But Guney wears the badge proudly.
"Infidel Izmir will remain infidel this time too," he said, before joining hundreds of thousands of people at a Republican People's Party (CHP) rally in the pouring rain last Saturday.
Turkey's third largest city and one of its most industrialized and modern, Izmir has nevertheless seen investment go elsewhere since AK first came to power in 2002.
"They moved all factories to Istanbul," said Guney, a retired worker. "We don't vote for them so Izmir became infidel."
Turkey's westernized secularist elite has seen its privileges and lifestyle threatened while the once marginalized and religious masses from the Anatolian heartland have risen to political and economic prominence with AK.
Thanks to its success in creating a booming economy and reforms that have won favor among investors, AK is expected to easily win a third consecutive term of single-party rule.
Meanwhile the largest opposition CHP, the party of Turkey's revered founder, soldier statesman Mustafa Kemal Ataturk, is struggling to seem current in a country with a vibrant and globalised economy and a population with an average age of 28.
One sign of hope is in the CHP's new leader Kemal Kilicdaroglu.
Nicknamed "Gandhi Kemal" because of his slight, bespectacled appearance, Kilicdaroglu has been in the job since last year, but opinion polls show him turning around the CHP's fortunes.
"The stakes in these elections are not so much who wins but the margin of victory of AK and the CHP's vote under Kilicdaroglu," said Sinan Ulgen, from the Istanbul-based Center for Economics and Foreign Policy Studies think tank.
"The CHP for a long time has failed to offer solutions to a country undergoing rapid social and economic changes and has been entrenched behind an anti-religious and anti-liberal discourse, but Kilicdaroglu is trying to make the CHP into a modern social-democrat option for the future," Ulgen said.
Opinion polls put support for the CHP at 25-30 percent, some 20 points behind Erdogan's AK, but up from the 21 percent the CHP won in 2007. A 30 percent score would be seen as a victory.
The far-right Nationalist Movement Party is seen at 10-12 percent and a Kurdish party is also expected to win seats.
If the CHP can stop AK from scoring a two-thirds majority in parliament, it will stand a better chance of blocking Erdogan's plans for a new constitution which foes fear could be a nail in the coffin of Ataturk's secularist Turkey.
Secular middle-class Turks -- engineers, teachers, doctors, lawyers, bureaucrats -- used to trust the CHP, but failure to modernize made it unelectable even for liberals who distrust AK for its perceived Islamic inclinations.
Under Deniz Baykal, Kilicdaroglu's predecessor who was toppled after a sex scandal, the CHP fought old battles on the central role of the state versus Islam and minorities, while a confident AK pushed a modernizing agenda of economic and social reform, opening Turkey to private investment and trimming the army's powers.
Kilicdaroglu has dropped the CHP's long-standing opposition to letting women wear headscarves in universities, said minority Kurds should be allowed to be taught in Kurdish and, in another reversal of party policy, has spoken favorably of free markets and Ankara's European Union membership bid.
He has even distanced the party from the meddlesome military, long a CHP friend.
To garner support among the disadvantaged, Kilicdaroglu has also promised populist measures -- such as increasing benefits for the poor and pensioners -- and has said unemployment and inequality will be his priorities rather than making his party's sole purpose defending secularism.
"Before Kilicdaroglu, we voted CHP because it was seen as the defenders of modern Turkey, but that is really an old-fashioned argument," said a 28-year-old woman dentist, who did not give her name for fear of losing her job.
"Now the CHP discusses programs such as health policies, and other important things to run the country. Baykal made us feel hopeless as voters."
While foreign investors would welcome another four years of AK, some are concerned about the lack of a viable opposition.
Nearly a decade of uninterrupted rule has resulted in the AK amassing power and critics say Erdogan has become increasingly autocratic and is trammeling free expression.
"If you are a long-term investor you want to see structural reforms and the government regain its reformist spirit so you need a strong opposition to keep the government in check," said Wolfango Piccoli from the Eurasia risk consultancy group.
SUMMER SKIRTS, TRENDY YOUTH
Back in Izmir, where women stroll along the corniche in short summer skirts and the trendy youth pack the nightclubs, secularism is cherished as Ataturk's most sacred legacy.
Many fret that the tightening of laws on alcohol and lifting of bans on the use of the Muslim headscarf are first steps down a path that will lead to a society closer to Iranian religious puritanism than Ataturk's vision for Turkey.
The AK denies this, saying it is merely conservative on social issues, in a country where conservatism is the norm.
"Alcohol bans, internet censorship plans are all very disturbing," said Mustafa Oguz, a 26 year-old lawyer, told Reuters during the CHP rally. "The governing party didn't keep its promises and intervened on fundamental rights and freedoms."
(Additional reporting by Daren Butler and Ece Toksabay in Istanbul and Ibon Villelabeitia in Ankara; Writing by Ibon Villelabeitia; Editing by Simon Cameron-Moore and Sonya Hepinstall)