Turkey's secular elite, including army generals, distrust Gul's Islamist past and the fact his wife wears the Muslim headscarf. They blocked his first bid to become president in May, forcing an early election that his ruling AK Party won.
Turkey's lira currency lost 3.3 percent against the dollar and stocks also fell on Tuesday on global market jitters and investor fears of renewed tensions over Gul's candidacy.
"Protection of secularism is one of my basic principles. Nobody should worry about this," Gul told a news conference after formally registering as a candidate.
"Impartiality will definitely be my first and most important principle." He said he would try as head of state to represent all Turks whatever their views.
Parliament is due to elect a new president in a series of votes starting next Monday. Only Gul has so far entered the race although the far-right Nationalist Movement Party (MHP) has said it will field a candidate.
Nominations close at midnight on Sunday, August 19.
Gul's centre-right AK Party has 341 seats in the 550-member parliament and he is expected to win in the third round on August 28 when he needs only a simple majority.
In Turkey, the president carries great symbolic weight and is commander in chief of the armed forces. He can also veto laws once and appoints top judges and university rectors -- pillars of the secular order together with the army.
Trying to reassure his critics in the military and state bureaucracy, Gul evoked the memory of Mustafa Kemal Ataturk, revered founder of the secular republic, saying he would follow the modernizing vision of the soldier-statesman.
SECULARIST SNUB
The leaders of Ataturk's Republican People's Party (CHP), the second biggest in parliament after the AK Party, said they would not attend the presidential vote in parliament and would boycott presidential receptions if Gul were elected.
"Gul's speeches and writings in the recent past show that he does not agree with the basic values of the republic," CHP Deputy Chairman Mustafa Ozyurek said.
The pro-business AK Party believes Gul, a gently spoken diplomat and architect of Turkey's bid to join the European Union, is the best man to succeed staunchly secularist President Ahmet Necdet Sezer, whose mandate has now expired.
The party says its victory in July 22 election gives it the moral and political right to re-nominate Gul and to show that elected politicians, not generals, run this largely Muslim but secular country of 74 million people.
The army ousted a government it deemed too Islamist just 10 years ago. Gul had served in that cabinet as a state minister.
In April, the army helped scupper Gul's first bid with a midnight Internet posting making clear its disapproval.
But Gul said he did not expect any problems with the army.
"Turkey has a strong democracy and the rule of law... I trust we will all follow the constitution, which is our guide," he told foreign reporters on Tuesday evening at his residence, adding he had worked closely with the army as foreign minister.
Gul also played down concerns over his wife's headscarf. "It is her personal choice... It is not illegal," he said.
