Editor's note: Fareed Zakaria is a preeminent foreign affairs analyst and hosts "Fareed Zakaria: GPS" on CNN at 1 p.m. ET Sunday.
Fareed Zakaria says the decison by a Turkish court clears a great obstacle to the nation's development.
NEW YORK (CNN) -- Turkey's top court has narrowly rejected calls for the party and its leaders, including Prime Minister Recep Tayyip Erdogan and President Abdullah Gul, to be banned from politics.
After days of deliberation in the 4½-month case, the constitutional court's judges voted 6-5 against an indictment accusing Erdogan's Justice and Development Party of pursuing an Islamist agenda and seeking to undermine Turkey's staunchly secular constitution. The court did impose a financial penalty stripping the party of half its public funding next year.
A verdict against the party, known as AKP, which had seen its efforts to lift a ban on the wearing of headscarves in universities overturned by the court this year, had been widely expected in the weeks leading up to the judges' deliberation amid simmering tensions between government supporters and members of Turkey's secular political elite.
CNN spoke to world affairs expert and author Fareed Zakaria about these developments.
CNN: Why is Turkey's court decision important?
Zakaria: It clears up one of the great obstacles to Turkey's forward development. You've had a battle between the AK Party, which is very popular, and the ultrasecular establishment in Turkey: generals, judges and some businessmen.
The battle threatened to throw the country into turmoil. Now, it seems that stability has been restored. The party won't be banned, but it will curtail some of its more overtly Islamic activism. (Which was not very Islamic, in my opinion, anyway.)
CNN: Is this important beyond Turkey?
Zakaria: Yes, Turkey is the only genuinely liberal democracy in the Muslim world. If it appeared that it could not strike a balance between religion and politics, it would send a terrible signal.
People around the Islamic world should now take a hard look at Turkey, where the AK Party, which is full of very religious Muslims, is also the most progressive party in the country, passing dozens of liberal, European-style reforms of the economy, legal and social system. Turkey under the AK Party shows the most inspiring combination of Islam and democracy in the world.
CNN: How does Turkey fit into the region?
Zakaria: Right now, it is pivotal. It has good relations with Iran; in fact, the Iranians hold extensive discussions with the Turks about their nuclear program. It has growing ties in Iraq (which is also on its border). It has relations with Israel, which is rare in the Middle East. The one big problem is that its relations with the United States have frayed over the past few years.
CNN: Why is that?
Zakaria: Mostly because of the Bush administration. The Pentagon never forgave Turkey for not allowing a second front (through Turkey) for the invasion of Iraq.
The administration didn't understand that Turkey was a real democracy and that its people were opposed to the invasion by 95 percent. That meant, even though the government wanted to support the U.S., the motion was defeated in parliament.
We keep saying we want democracy in the Middle East. Here we had one and couldn't accept how it worked!
CNN: What does the future hold for the country?
Zakaria: The economy is likely to slow in the short-term, but other than that, things are looking up for Turkey. Its negotiations with the European Union are moving well, relations with the U.S. will probably improve, and its position in the region is getting stronger. It is a major regional power.