By Jonathan Spicer

ISTANBUL (Reuters) - Turkey's President Tayyip Erdogan has probably never held more global sway: he will host the first direct Russia-Ukraine peace talks in three years on Thursday, days after his country's militant nemesis, the Kurdistan Workers Party (PKK), dissolved.

His growing capital as international statesman - working towards stability in Eastern Europe and the Middle East, and receiving accolades from U.S. President Donald Trump for it - is turbocharging Turkey's rising regional influence.

Yet the timing of it appears odd and even agonising to many at home who fear it could bolster his domestic political goals.

The arrest and jailing of Erdogan's main political rival, Istanbul Mayor Ekrem Imamoglu, prompted the largest protests in a decade in March and April over what critics called a politicised and anti-democratic legal crackdown.

Imamoglu denies the charges he faces, while Ankara denies the criticism of autocratic behaviour.

Yet these seemingly parallel universes - international versus domestic - underscore Erdogan's tendency over 22 years running Turkey to shift the focus abroad when political or economic problems are brewing at home.

In line with this pattern, Erdogan in May 2022 blocked the planned enlargement of NATO at a time when Turkey's inflation rate was soaring toward 85%, waiting until early last year to finally approve Sweden's membership bid in exchange for concessions.

"Erdogan has never been this pivotal of a player in geopolitics," said Birol Baskan, a Turkey-based political scientist. "There were dramatic twists and turns in geopolitics, with the re-election of Donald Trump of particular note, though I think Erdogan's biggest gain is indisputably Syria."

According to Turkish government officials, Erdogan's backing of Syrian rebels over the last decade finally paid off for them - and him - when they ousted former President Bashar al-Assad in December, leaving Ankara with heavy influence in Damascus and beyond as the region sought to recover from war.

Erdogan's sway grew in January when Trump returned to the White House, given their close ties in Trump's first term.

Trump, who boasts of "great relations" with Erdogan, said he will be a good host for Russia-Ukraine peace talks in Istanbul. He also said U.S. Secretary of State Marco Rubio would make a last-minute trip there, and even floated attending in person.

Ukraine's President Volodymyr Zelenskiy, set to visit the Turkish capital Ankara on Wednesday, has dared Russian counterpart Vladimir Putin to meet him in Istanbul on Thursday to agree a ceasefire, though Putin has not committed to meet.

Erdogan - fielding calls or visits from U.S., Russian, Ukrainian, Saudi, French, Italian, NATO and other world leaders in the last week alone - has urged seizing the opportunity for peace between its Black Sea neighbours to the north.

KURDISH MILITANTS DISBAND

Peace is also within reach to Turkey's south, where PKK militants are now largely based after a 40-year insurgency against the Turkish state that killed more than 40,000 people.

Weakened after years of Turkish bombardment, the group said on Monday it decided to disband and disarm at a congress last week in northern Iraq.

While a tricky path lies ahead, it marked a significant victory for Erdogan. He had sought to capitalize on vulnerabilities of PKK-affiliated Kurdish forces in northern Syria after Assad's fall, including his bet that Trump would soon pull out U.S. troops allied with those forces.

Musavvat Dervisoglu, chair of Turkey's opposition nationalist IYI Party, warned that Erdogan was using the PKK decision to secure a "lifetime presidency", given that the support of Kurdish voters could help him adopt a new constitution and extend his rule beyond 2028 when his term expires.

Erdogan says a new constitution is a priority but has not said whether he wants to run again.

Imamoglu's lead over Erdogan in polls has edged higher since the mayor was arrested in March - which at the time hit Turkey's lira and set back the central bank's battle with years of soaring inflation.

But last week, a Turkish court order blocked Imamoglu's access to his social media X account, potentially further isolating him as he awaits a court hearing on corruption charges.

Meanwhile the nightly protests in which tens of thousands of Turks filled streets nationwide to denounce the president for wielding the judiciary for political gain - charges he denies - have largely faded.

Harun Armagan, vice chair of foreign affairs for Erdogan's AK Party, said Imamoglu's case "is not a political process, but a judicial one" that is separate from the "significant political developments unfolding" elsewhere.

"The PKK laying down arms and disbanding...will be recorded as historic milestones in the context of Turkish politics," he told Reuters.

TURKEY-BROKERED PEACE DEAL?

While some European leaders denounced the arrest of Imamoglu, many have also endorsed Erdogan's offer to host Russia-Ukraine talks, including French President Emmanuel Macron who stressed on a call with Erdogan on Sunday the "necessity" of Russia agreeing a ceasefire.

In another diplomatic boon for Erdogan, Europe has warmed to Turkey in recent months, diplomats say, as it scrambles to bolster defences and find guarantees for Ukraine under any forthcoming ceasefire deal pushed by Trump.

Turkey has NATO's second-largest army and makes armed drones used extensively by Ukraine against Russia. At the same time, Ankara has rejected Western sanctions on Moscow, walking a fine line between the warring nations and maintaining their trust.

"Even if peace talks stumble in Istanbul, Erdogan still gets credit. He loves his name stamped next to a peace deal," said Onur Isci, associate professor of international relations at Kadir Has University.

"He is in a very powerful diplomatic position and appears to be scoring more and more points."

The latest point was scored on Tuesday when Trump, in Riyadh, made the surprise announcement that the U.S. would lift all sanctions on Syria, after sources said Erdogan and Saudi Crown Prince Mohammed bin Salman urged him to do so.

Erdogan and Trump have held at least three calls since Trump's re-election, and spoke again on Wednesday with other leaders about the Syria decision.

Trump also appointed a longtime advisor, Thomas Barrack, as U.S. ambassador to Turkey who upon arrival last week said he intends to elevate the relationship from a "great" one to an "extraordinary" one.

(Reporting by Jonathan Spicer; Editing by Alexandra Hudson)