* Saudi Arabia launches first mixed-gender new university
* Primary state education inefficient; needs overhaul
* Kingdom ranks 93rd in UNESCO's global index on education
RIYADH, Sept 15 (Reuters) - Saudi Arabia is launching its first co-educational high-tech university, but unless clerical influence is removed the state education system will not move into the modern age, analysts say.
King Abdullah has invited heads of state, business leaders and Nobel laureates next week to the opening of a technology university which has attracted top scientists and is meant to produce Saudi scientists and engineers.
Faced with a rapidly growing young population the university is part of plans to better qualify Saudis for the private-sector job market and lower the conservative Gulf Arab state's dependence on millions of expatriate workers and oil revenue.
The King Abdullah University of Science and Technology (KAUST) is the first institute in one of the world's biggest oil exporters outside the reach of the education ministry, where clerics opposing cutting religious content have a strong say.
And men and women will be able to mingle, a stark contrast to otherwise strict gender segregation in the Islamic kingdom.
Analysts and diplomats say the KAUST launch is a step in the right direction, but state education will remain inefficient unless the government starts a radical overhaul.
"We need to change the mindset of the teaching concept. We need to review all our educational practices... We also need to be consistent with the needs of modern education and market requirements," said Saudi columnist Abdullah al-Alami.
Ghanem Nuseibeh, a senior analyst at Political Capital in Dubai, agreed: "The bigger problem remains primary education."
Despite its immense financial resources, the parameters of Saudi school and university education are governed by religious strictures and many subjects are off-limits for women to study.
The U.S. ally is a monarchy without a parliament where the Al Saud family rules in alliance with clerics who apply an austere version of Sunni Islam through mosques, the judiciary and parts of education. They even have their own police force.
While KAUST enjoys almost unlimited funds, sophisticated equipment and is run by an independent board, most Saudi schools and universities have curriculums still dominated by religion, despite reform efforts begun after the Sept. 11 attacks of 2001.
Saudi Arabia faced international pressure to reduce the influence of its puritanical religious establishment since 15 of the 19 attackers were Saudi, acting in the name of al Qaeda leader Osama bin Laden, also a Saudi.
"Part of the problem lies in the lack of emphasis on scientific subjects," said James Reeve, senior economist at Saudi bank Samba Financial Group.
At secondary level, 24 percent of courses are about maths or science, less than 32 percent in Jordan or 28 percent in Iran, he said, citing figures by Booz Allen Hamilton for a 2002 study.
Education is at the heart of reform King Abdullah has promoted since taking office in 2005 as the country needs to absorb a mostly young native population of 18 million.
"Some estimates suggest Saudi Arabia will need to double its current employment level over the next decade just to satisfy the requirements of new job market entrants," Reeve said.
But despite launching a $2.4 billion education programme in 2005, results are minimal: Saudi Arabia ranked 93rd of 129 behind Albania, the Philippines, Peru and Tajikistan in UNESCO global index assessing quality of education in 2008.
In February, King Abdullah removed two hardline clerics in a cabinet reshuffle and named the first female deputy education minister, but diplomats say he has to balance power by accommodating clerics and conservatives opposing big changes.
"Saudi has vowed to remove religious hatred passages from textbooks but they need to do a grassroot reform against the religious people which seems unlikely," said a Western diplomat.
The KAUST inauguration comes at a time when liberals' hopes for reforms have been repeatedly dashed: The only film festival was cancelled in July after clerics voiced opposition while other cultural events were also stopped or pared down.
Interior Minister Prince Nayef, a key royal conservative who was this year promoted to second deputy prime minister, raising his chances of becoming king, backs the religious police who have been under pressure since some Saudis died in their custody or in car accidents as the morality squad pursued them.
"The (KAUST) project has caused nervousness among clerics who view this as a step towards Westernisation," said Rochdi Younsi at Eurasia Group. "For the scientists it will be important to get the academic freedom they are used to."
Some fear KAUST is destined to become an oasis of academic freedom, away from the prying eyes of the clerics in a remote area north of Jeddah, with little impact on society at large.
"Whilst the KAUST will provide long-term prospects and greater incentives ... to move into applied higher education, the KAUST may become another institution that is isolated from the rest of the Saudi educational system and society," said Nuseibeh, a political risk analyst.
Editing by Andrew Hammond and Samia Nakhoul
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