ISTANBUL Turkish shares rose 5.66 percent Friday as investors saw signs of a breakthrough when a highly-trusted political trio, among them the economy minister, announced a joint move to pull the country out of political and economic turmoil.

But persisting uncertainty, which has threatened to derail vital IMF-backed economic reforms, kept the markets fragile as the crumbling government of Prime Minister Bulent Ecevit teetered on the brink of collapse, AFP quoted brokers as saying.

The Istanbul Stock Exchange's national index gained 509.2 points to close the day at 9,499.4, up from 8,990 points a day earlier.

The currency eased to 1.665 million to the dollar after shooting up to 1.723 million on Thursday.

Sentiment rose when outgoing foreign minister Ismail Cem announced he was forming a new political party in cooperation with Economy Minister Kemal Dervis, the driving force behind IMF-backed reforms, and Husamettin Ozkan, the former deputy prime minister.

Cem and Ozkan are among seven ministers and about 40 MPs who have abandoned Ecevit in five days.

Dervis is openly siding with them, but he retracted a short-lived decision to resign on Thursday to keep the reins of the economy and ensure the turmoil does not doom a $16-billion stand-by credit from the International Monetary Fund.

"There is great excitement about the initiative of the three. If they come on strong, they will bring stability and confidence," Kurt Onur, a broker at Disbank said.

"But still we do not know what will happen next week," he added.

Dervis's resignation Thursday had demoralized investors. The heavy pressure that ensured his return seemed to show how little room to manuever Ecevit has against the IMF's most-trusted man in Ankara.

Dervis is now in an odd position -- he retains his cabinet seat as the guarantor of economic reforms, while openly siding with Cem and Ozkan in their alleged plan to unseat Ecevit and lead the country safely to early polls.

"The fact that Dervis is staying is the most important factor, especially during ongoing talks with IMF officials," a broker at global securitties said in reference to a visit by an IMF delegation here to review economic progress. He said the new political initiative was welcomed, but added: "We still do not know what the future holds in store for us."

An economist at Merrill Lynch in London told the NTV News channel that snap polls should be called as early as possible if Ecevit does not step down to open the door for a stronger government.

"Macro-economic balances could start to improve rapidly on one condition: If an administration capable of pressing with economic reforms comes to power," Mehmet Simsek said.

And this administration could be their own, according to Dervis.