Bruised by one of the worst setbacks of his political career, Turkey's pugnacious President Recep Tayyip Erdogan is ready to play the card of calling snap polls in a high-stakes gamble that could yet backfire.

Erdogan's Justice and Development Party (AKP) failed to win an overall majority in June legislative elections for the first time since coming to power in 2002, forcing it into the messy business of coalition politics. The result was seen as a personal hiding for Erdogan, whose charisma had turned the AKP into one of the world's most successful election-winning machines and who had dreamt of ruling Turkey under a new presidential system.

Talks to form a coalition have since rumbled on, with a grand coalition between the AKP and the main opposition Republican People's Party (CHP) looking like the only viable option.

The political impasse has come as Turkey is plunged into one of the biggest security crises of the AKP's rule, with the military pursuing a controversial cross-border "anti-terror" operation against Islamic State militants in Syria and Kurdish militants in northern Iraq. But Erdogan's heart never seems to have been in the coalition talks, grumpily declaring that "if we expect coalitions to bring benefits to our country, it is in vain".

'Heading for early polls'

Instead, analysts and commentators believe he has another preferred scenario in mind - the failure of the coalition talks and a re-run of the elections in snap polls to make up the ground lost by the AKP on June 7. "It's now certain. Turkey is heading for early elections," wrote the well-connected pro-AKP columnist Abdulkadir Selvi in the Yeni Safak daily.

"President Erdogan has wanted early elections since the night of June 7," he added. "It's not clear if the AKP will win an overall majority. But they want to try."

Prime Minister Ahmet Davutoglu has until August 23 to present a proposal for a coalition to Erdogan, after which the president can call new elections.

Analysts say the most likely scenario is the current AKP cabinet will stumble on as a minority government propped up by the Nationalist Movement Party (MHP) before early elections are called for November or in 2016.

"If political parties fail to form a coalition government, probably an AKP minority government will take Turkey into a new election," said Ozgur Altug at BGC Partners in Istanbul.

Pro-AKP newspapers have argued that internal polling has shown that the party would improve on its June 7 score of 40.9 percent in a re-run of the elections to win an overall majority.

'A big risk'

But analysts are far from convinced the results would be so different.

The AKP would hope to squeeze the pro-Kurdish Peoples' Democratic Party (HDP) - which won 13.1 percent of the vote in June - back below the 10 percent threshold required to secure seats in parliament. But achieving such a change over such a short time may be over ambitious, even for the well-oiled AKP campaign machine.

"At the current stage, an early election is a big risk for the AKP," said Ziya Meral, director of the Centre on Religion and Global Affairs. "It appears with the latest developments the HDP's share of vote will not drop but it is a big possibility that the MHP's will increase," he added. Meral suggested Erdogan may prefer to keep a minority government going and then try to pick up votes from nationalists and religious conservatives in new elections later in 2016.

Critics have accused Erdogan of launching air strikes against the banned Kurdistan Workers' Party (PKK) in the hope of discrediting the HDP in the eyes of non-Kurdish secular voters who supported the party in June. The government has angrily dismissed the claims.

An HDP official told AFP the party expected its vote to go up, not down in any re-run: "We will emerge stronger if an early election is called."

The AKP suffered a landslide defeat to the HDP in the Kurdish-dominated southeast of Turkey and recovering those Kurdish votes will be tough amid the onslaught on the PKK.

Financial markets are hoping that a reform-orientated AKP-CHP coalition may yet materialise and fear the political uncertainty that would come with early elections. The Turkish lira and stock markets fell sharply after the June poll. If early elections are on the agenda this "would mean a serious correction for the Turkish economy and markets which would not last just a month," said Altug.–AFP