* 13 Muslims of trial for spreading radical Islam
* Burgas bomb has also highlighted splits in society
SARNITSA, Bulgaria, 27 (Reuters) - A bucolic painting of snowy mountains and traditional Bulgarian craftwork mingle in Said Mutlu's office with Arabic books and a calendar depicting Mecca.
The room reflects the mixed identity of Mutlu and Sarnitsa, a lakeside town in Bulgaria's remote south where women wear headscarves, men chat over coffee on the square and houses cluster around a mosque rather than a church. Bulgaria is an EU country where Muslims are a centuries-old community, not recent immigrants; but some feel that long co-existence is in peril.
Mutlu is on trial facing charges of running an unregistered branch of Al Waqf-Al Islami, a foundation funded mainly by hardline Salafi Muslims from Saudi Arabia who preach an ultra-conservative brand of the religion. He denies the charge.
"There is tension among people here. They are deeply shocked by the trial," said Mutlu, a quietly spoken and earnest 49-year-old man wearing tracksuit trousers striped with the colours of Bulgaria's national flag.
Mutlu is charged that he had preached, in one of Sarnitsa's mosques and in a coffee shop, an anti-democratic ideology promoting imposition of sharia law and inciting religious hatred.
Citing confiscated Islamic literature and witness statements, prosecutors say Mutlu and 12 other religious leaders and activists in southwest Bulgaria had been on Al Waqf-Al Islami's monthly payroll to spread radical ideas.
All deny any wrongdoing and many of the witnesses questioned have changed their statements in the courtroom.
The case, combined with the bombing of a bus carrying Israeli tourists this summer, has highlighted splits in society.
Nationalists have charged that the Balkan country could be an easy route into Europe for radical Islamists.
Protests by both Muslims, who make up some 15 percent of Bulgaria's 7.3 million people, and nationalists have rocked the town of Pazardzhik, a larger town at the foot of the Rhodope mountains where Mutlu's trial is taking place.
"When things in the country do not go well, they try by creating ethnic tensions to divert attention from the real problems," Mutlu said, fixing his glasses and shrugging his large shoulders.
Protesters led by far-right parties Attack and VMRO wave banners at demonstrations reading "Our religion is Bulgaria" and "Tough sentences for fanatics".
"Today they bring radical Islam and tomorrow they surely will ask for Islamic autonomy," said retired teacher Pavel Petkov. "We must wake up while it is still not too late."
Mutlu, who studied Islam in Saudi Arabia, has been an imam in Sarnitsa since 1998 and has won wide respect in the local community for a knowledge of theology and soft-spoken manner.
"As far as I know him, the man is clean. He has been an imam here for over 20 years. We cannot say anything bad about him," said Mustafa Alikanov, mayor of Sarnitsa.
"The town stands behind him".
Some Bulgarian Muslims are ethnic Turks, others Bulgarians whose ancestors converted under Ottoman rule that ended in 1878. The Islamic population is the highest proportion in any European Union member state.
The trial has revived memories of the 1980s when hundreds of Muslims were forced to change their names to Bulgarian ones and over 300,000 left the country due to a campaign by communist dictator Todor Zhivkov to revive mainstream Bulgarian culture - a policy that contributed to his fall from power in 1989.
With an election due next summer and rightist Prime Minister Boiko Borisov unsure of securing a second term, many in the Islamic community suspect the charges against Mutlu and others are cooked up and designed to bolster government support.
They say the government of the EU's poorest country neglects their needs and an economy which is recovering only slowly from a deep recession, with the number of jobless at 11 percent and rising, is fostering discontent among both communities.
Areas where Muslims live tend to be poorer and the community feels neglected over the more than 20 years since the fall of communism. The defendants deny receiving money from Al Waqf-Al Islami, though some studied in Saudi Arabia.
"We have the alienation, the disappointment and this on top," said Mikhail Ivanov, minority issues lecturer at Sofia's New Bulgarian University. "The balance is broken. We have a country which is indifferent to 1 million of its people."
The fault lines became clearer after a suicide bomber killed five Israeli tourists and a Bulgarian driver at the Black Sea port of Burgas in July, an attack Israel blamed on Iran and the Lebanese Islamist group Hezbollah. Iran has denied the charge and accused Israel of carrying it out.
Some of the concern centres on Bulgaria's efforts to join the EU's passport-free Schengen zone. Once immigrants were in Bulgaria, they would be free to travel throughout the bloc.
"The public was terrified by Burgas and this fuelled an idea that there's a problem under the surface that's going to explode any moment," said Ioannis Michaletos, an independent Athens-based security analyst for southeast Europe.
The office of the Chief Mufti is keen to limit troubles between the communities and chief secretary Ahmed Ahmedov said it has known the defendants for a long time and not observed anything unusual in their behaviour. But things can escalate.
"When you persistently mess in the hive, sooner or later it may blow out," Ahmedov said. "People should know we are not raising suicide bombers in the basement."
Another of the defendants, Hairi Sherifov, runs a youth soccer club in Rudozem, 10 kilometers from the Greek border.
Accused of teaching the children extreme Islam, which he denies, Sherifov said the 50-odd boys doing soccer drills at a crumbling stadium were both Muslim and Christian and there was no religious element in the club.
"In the mixed communities (like) Rudozem, where we all know each other, I think it will be hard - not to say impossible - for tensions to escalate," he said. "But people who are far from us, and they do not know us, they may get it wrong."