* Erdogan says coup plotters will pay heavy price
* Military said martial law imposed, “peace council” to rule
Turkish President Recep Tayyip Erdogan is reported to have survived an attempted coup. But it is still not clear who is in control.
Erdogan, who had been holidaying on the coast when the coup was launched, flew into Istanbul before dawn on Saturday and was shown on TV appearing among a crowd of supporters outside the airport, which the coup plotters had failed to secure.
The uprising was an “act of treason", and those responsible would pay a heavy price, he later told reporters at a hastily arranged news conference. Arrests of officers were under way, and it would go higher up the ranks, culminating in the cleansing of the military.
Gunfire and explosions had rocked both the main city Istanbul and capital Ankara in a chaotic night after soldiers took up positions in both cities and ordered state television to read out a statement declaring they had taken power.
But by early Saturday, Reuters journalists saw around 30 pro-coup soldiers surrender their weapons after being surrounded by armed police in Istanbul's central Taksim square.
They were taken away in police vans as a fighter jet repeatedly screeched overhead at low altitude, causing a boom that shook surrounding buildings and shattered windows.
A successful overthrow of Erdogan, who has ruled Turkey since 2003, would have marked one of the biggest shifts in the Middle East in years, transforming one of the most important U.S. allies while war rages on its border. A failed coup attempt could still destabilise a pivotal country.
Before returning to Istanbul, Erdogan appeared in a video call to the studio of the Turkish sister channel of CNN, where an announcer held up a mobile phone to the camera to show him. He called on Turks to take to the streets to defend his government and said the coup plotters would pay a heavy price.
By the early hours of Saturday morning, lawmakers were still hiding in shelters inside the parliament building in Ankara, which had been fired on by tanks. Smoke rose up from nearby, Reuters witnesses said. An opposition MP told Reuters parliament was hit three times and that people had been wounded.
A Turkish military commander said fighter jets had shot down a helicopter used by the coup plotters over Ankara. State-run Anadolu news agency said 17 police were killed at special forces headquarters there.
As the night wore on, momentum turned against the coup plotters. Crowds defied orders to stay indoors, gathering at major squares in Istanbul and Ankara, waving flags and chanting.
“We have a prime minister, we have a chief of command, we're not going to leave this country to degenerates,” shouted one man, as groups of government supporters climbed onto a tank near Istanbul's Ataturk airport.
Erdogan and other officials blamed loyalists of a U.S.-based cleric for the coup attempt; his movement denied any part in it.
U.S. SUPPORT
The United States declared its firm backing for Erdogan's government. Secretary of State John Kerry said he phoned the Turkish foreign minister and emphasised “absolute support for Turkey's democratically elected, civilian government and democratic institutions".
The coup began with warplanes and helicopters roaring over Ankara and troops moving in to seal off the bridges over the Bosphorus that link Europe and Asia in Istanbul.
Reuters reporters saw a helicopter open fire in Ankara. Anadolu said military helicopters had fired on the headquarters of the intelligence agency.
In the first hours of the coup attempt, airports were shut and access to internet social media sites was cut off.
Soldiers took control of TRT state television, which announced a countrywide curfew and martial law. An announcer read a statement on the orders of the military that accused the government of eroding the democratic and secular rule of law. The country would be run by a “peace council” that would ensure the safety of the population, the statement said.
Shortly afterwards, TRT went off the air. It resumed broadcasting in the early hours of Saturday.
Anadolu said the chief of Turkey's military staff was among people taken “hostage” in the capital Ankara, but Prime Minister Binali Yildirim later said he was back in control.
“NOT A TINPOT COUP"
Early in the evening the coup appeared strong. A senior EU source monitoring the situation said: “It looks like a relatively well orchestrated coup by a significant body of the military, not just a few colonels. They've got control of the airports and are expecting control over the TV station imminently. They control several strategic points in Istanbul.
“Given the scale of the operation, it is difficult to imagine they will stop short of prevailing.”
One European diplomat was dining with the Turkish ambassador to a European capital when guests were interrupted by the pinging of urgent news on their mobile phones.
“This is clearly not some tinpot little coup. The Turkish ambassador was clearly shocked and is taking it very seriously," the diplomat told Reuters as the dinner party broke up. “However it looks in the morning, this will have massive implications for Turkey. This has not come out of nowhere.”
Turkey, a NATO member with the second biggest military in the Western alliance, is one of the most important allies of the United States in the fight against Islamic State, which seized swathes of neighbouring Iraq and Syria.
The Pentagon said there was no impact on operations against Islamic State from the U.S. air base at Incirlik in Turkey.
Turkey is also one of the main backers of opponents of Syrian President Bashar al-Assad in that country's civil war, host to 2.7 million Syrian refugees and launchpad last year for the biggest influx of migrants to Europe since World War Two.
Celebratory gunfire erupted in Syria's capital Damascus after the army claimed to have toppled Erdogan. People took the streets to celebrate there and in other government-held cities.
Turkey has been at war with Kurdish separatists, and has suffered numerous bombing and shooting attacks this year, including an attack two weeks ago by Islamists at Istanbul's main airport that killed more than 40 people.
Turkish officials blamed the attempted coup on followers of Fethullah Gulen, an influential cleric in self-imposed exile in the United States who once supported Erdogan but became a nemesis. The pro-Gulen Alliance for Shared Values said it condemned any military intervention in domestic politics.
After serving as prime minister from 2003, Erdogan was elected president in 2014 with plans to alter the constitution to give the previously ceremonial presidency far greater executive powers.
Turkey has enjoyed an economic boom during his time in office and has dramatically expanded its influence across the region. But opponents say his rule has become increasingly authoritarian.
His AK Party, with roots in Islamism, has long had a strained relationship with the military and nationalists in a state that was founded on secularist principles after World War One. The military has a history of mounting coups to defend secularism, but has not seized power directly since 1980.
Prime Minister Yildirim said a group within Turkey's military had attempted to overthrow the government and security forces have been called in to “do what is necessary".
“Some people illegally undertook an illegal action outside of the chain of command,” Yildirim said in comments broadcast by private channel NTV.
“The government elected by the people remains in charge. This government will only go when the people say so.”
Airlines diverted flights en route to Turkey and canceled departures from Istanbul's Ataturk Airport as a coup attempt unfolded in the country on Friday, pitting Turkey's military against supporters of President Tayyip Erdogan.
A Reuters witness heard a loud explosion at Ataturk Airport. Television images showed tanks parked in front, while scores of people gathered in Istanbul and capital city Ankara to show their support for the elected government.
Government officials insisted that a small group within the military was behind the attempted coup, while the army officials claimed to have seized power.
“My Family are stuck in Istanbul airport and have no idea what is happening,” Twitter user Fatti (@Rubynapanahi) said. "What is going on with the world.”
Cynthia Wee (@Its_A_Cyn) said, “many stranded at airport #help,” noting in another post that her family was scared.
European air traffic control agency Eurocontrol said all flights arriving at Ataturk Airport were being diverted. Flight tracking website FlightAware.com so far listed 138 canceled departures for Friday and Saturday.
The crisis follows a series of bombings that have hit Turkey this year, including a suicide attack in June that killed 45 people at Istanbul's main airport. They have weighed on international travel to the country.
A British Airways flight to Istanbul on Friday night diverted to Sofia, Bulgaria, and a Lufthansa flight to Istanbul returned to its origin in Frankfurt, company spokeswomen told Reuters.
The U.S. Federal Aviation Administration said all U.S.-bound flights from Istanbul that were in the air prior to the airport's closing would be allowed to land in the United States as planned. Turkish Airlines did not immediately comment.
With reports of gunfire in the streets, governments from the United States to the United Kingdom and Mexico called on their citizens in Turkey to seek shelter.
“Things will be fluid for some time and all people can do is wait it out,” said Bruce McIndoe, chief executive of travel risk consultancy iJET. McIndoe said his firm had received calls from clients and their employees based in Turkey for advice.
As of July 2, international flight bookings to Istanbul for trips in the second half of the year were down 36 percent from a year ago, travel data analysis company ForwardKeys said on its website.
Arrivals from the Americas and Asia-Pacific were down 45 percent, according to ForwardKeys. In the past six months, bombings in Istanbul led to progressively sharper declines in bookings, it said