ANKARA -- Turkey's Parliament approved a major reform package on Saturday which includes abolishing the death penalty in peacetime and other measures aimed at preparing the country for European Union membership, Reuters said.

"Europe, We're Coming!" was *** Milliyet *** newspaper's headline.

The rights reforms include ending punishments for criticism of the armed forces and other pillars of the Turkish establishment, outlawing organ and people smuggling and easing restrictions on the Kurdish language.

Markets are hoping progress towards the EU will help attract foreign investment to haul Turkey's economy out of recession and bolster a $16 billion IMF economic rescue program.

The package ends years of state restrictions in key areas.

The vote to abolish the death penalty in peacetime was a watershed for a country that only three years ago was baying for the blood of PKK (Kurdistan Workers Party) guerrilla leader Abdullah Ocalan, blaming him for more than 30,000 deaths in conflict with security forces.

"Thank You" was the front page banner headline in *** Sabah *** daily newspaper. "The death penalty, the main obstacle for EU membership, is abolished with a historic vote," it said.

*** Sabah***, like most papers, went to press before the final vote on the whole package which did not come until after sunrise on Saturday. Parliamentarians had already voted through the reforms individually.

The package was rushed through Parliament by pro-EU forces who wanted to complete the reforms before campaigning starts for a general election on November 3. The package now only needs the president's ratification, expected to be a formality.

Ankara wants the European Union to set a date by the end of the year for Turkey to start membership talks. The EU wants to see reforms implemented as well as being passed before it sets a date and even some Turkish commentators admit that there is still work to be done to meet the EU's strict criteria.

"There are some very sensitive issues in this package," one Western diplomat said as Parliament was debating the reforms. "It's a significant step in the right direction."

Stocks and the lira rose on Friday amid hopes the reforms would pass.

Many Turks accept that the road to Europe is still a long one for a country struggling to overcome a financial crisis last year that halved the value of the lira, slashed more than a million jobs, and sparked the worst recession since 1945.

"It's obvious they will not accept us with such a bad economy," said Derya Sahin, a 19-year-old student in Ankara. But ***Milliyet*** columnist Guneri Civaoglu said the EU must take Turkey's candidacy seriously. "Acceptance of these new reforms will be a test of the sincerity of the EU. It's their turn."

The Nationalist Action Party (MHP) was the main opponent of some of the key reforms, fearing for example that allowing freedoms for the Kurdish language might encourage armed separatism in Turkey's mainly-Kurdish southeast.

The MHP, with 126 seats in the 550 seat Parliament, was the only party to vote against the entire package in the final vote.

The most heated debate surrounded the first clause of the package, removing the death penalty from Turkey's civil code except in times of war or near war.

Nationalists argued that this could save Ocalan, the PKK leader who was captured in 1999 after an international man-hunt.

Another major change allows television and radio broadcasts in Kurdish on the condition they follow constitutional principles and do not incite violence.

Expatriate Turkish Kurds in Europe have been broadcasting via satellite to Turkey for years, much to the anger of the Turkish state, which accused the channels of acting as a mouthpiece for separatist rebels of the PKK.

In one step that will be welcomed by the EU, the reforms also introduced tough penalties for people and organ smugglers.

The wealthy bloc is increasingly concerned by illegal immigration, much of which flows through the long borders and coastline of southeastern neighbor Turkey.