Gul, who enjoys popular support, is the first politician with a background in political Islam to win the symbolically important post in Turkey's modern history. In contrast to past inaugurations, the army top brass, some of the secular elite and the main opposition Republican People's Party stayed away from Gul's swearing-in ceremony.
Armed forces chief General Yasar Buyukanit said on Monday he saw "centres of evil" seeking to undermine the secular republic, a statement suggesting the army would not stand on the sidelines if it saw the separation between religion and state threatened.
Gul pledged to uphold the principle of secularism, which he said also guaranteed the freedom of religion. Gul won the third round of the voting in parliament on Tuesday. "As long as I am in office, I will embrace all our citizens without any bias," Gul said in his inauguration speech after he was sworn in as the 11th president of Turkey.
A few hundred secularists headed for the presidential palace to protest against Gul's swearing-in. Gul has established himself as a respected diplomat since the AK Party was first elected in 2002 and secured the launch of Turkey's European Union entry talks. The military suspects Gul and the ruling AK Party of harbouring a secret Islamist agenda.
Gul's election was a victory for the ruling AK party after army-backed efforts by the secular elite to block his attempt to win the presidency. These efforts led to a parliamentary election which the AK party won resoundingly in July.
Many observers expect Gul, who broke with an Islamist party in 1999, will try to avoid confrontation. "You shouldn't expect radical moves with Gul as president. Both his opponents, who are scared he might do so, will be surprised and his supporters hoping for radical moves will be disappointed," said academic expert Cengiz Candar.
Turkish financial markets were hurt by weaker global markets and rattled by the army statement. The lira showed little reaction to the vote, but fell to 1.3290 against the dollar. European Commission President Jose Manuel Barroso said Gul's election could give new impetus to the EU accession process. Prime Minister Tayyip Erdogan said he planned to present his new reform-oriented cabinet for approval on Wednesday to Gul.
POTENT SYMBOL The secular elite and Turkey's generals, who have ousted four governments since 1960, are wary of Gul's Islamist past and alarmed at the prospect of his wife wearing the Islamic headscarf in the Cankaya presidential palace.
The headscarf is for many a potent symbol of the religious influence that soldier-turned-politician Mustafa Kemal Ataturk banished from public life when he founded the modern, Western-style republic on the ruins of the Ottoman Empire.
"My mother will not come (to parliament)," Gul's son, Mehmet Emre, was quoted as saying by the state news agency Anatolian, suggesting Hayrunnisa was trying to avoid controversy. A survey conducted for the newspaper Milliyet showed 72.6 percent of participants regarded it as "normal" for the wife of the president to wear a headscarf, while 19.8 percent said they would be uncomfortable about it.
Turkey, a key member of Nato, has faced political turmoil since April when the AK Party first nominated Gul as its candidate. "We welcome this exercise in Turkish democracy. It continues the course of democratic development in that country," said US State Department spokesman Tom Casey.
The AK Party has gradually moved closer to the centre of Turkish politics and Gul's election completes its capture of all top state institutions. In Turkey, the government holds most power but the president can veto laws and official appointments and name judges. The post carries some moral weight, as it was first held by Ataturk. Both Gul and Erdogan - who have both broken with political Islam - say they are loyal to secularism and their party's July landslide win gives Gul a strong presidential mandate.