(Refiles to add dropped name of newspaper in paragraph 5)

By Andrew Hammond

RIYADH, April 3 (Reuters) - Saudi Arabia plans to hold a conference of senior Muslim clerics from around the world this year to promote moderation in Islam and fight extremism, a newspaper reported on its Web site on Thursday.

It was not clear if the event is linked to a call by King Abdullah last week for dialogue of Muslims, Jews and Christians.

Such a meeting will be a milestone for the kingdom where a hardline school of Sunni Islam holds sway and has influenced al Qaeda and its Saudi-born leader Osama bin Laden.

Liberal reformers in Saudi Arabia are engaged in a battle with religious hardliners over the direction of the country, a key U.S. ally and the world's biggest oil exporter.

Saudi daily Asharq al-Awsat said the plans to organise a conference of Islamic scholars would be pursued in April and May with an eye to holding the event later this year.

The plans were made public at a seminar in King Saud University where the Grand Mufti, the government's official spokesman on religious affairs, talked of the need for "the middle way" in Islam and appeared to attack radical preachers.

"The extremism of fanatics cannot be considered part of religion, even if they are falsely wearing religious robes," Sheikh Abdel-Aziz Al al-Sheikh said, according to the paper.

He described "the middle way" as "the piety that should guide young people to good and warn them away from preachers of darkness ... and deviation."

The comments come after a controversial fatwa, or religious edict, by a prominent independent Saudi cleric that proscribed the death penalty for two writers if they do not recant newspaper opinion pieces deemed "heretical".

King Abdullah is widely regarded as a supporter of the liberals whose plans to change the image of Islam in Saudi Arabia and promulgate reforms have been resisted by clerics.

In his call for an interfaith dialogue last week, the king said he had won the support of some Saudi clerics for a series of meetings of the world's Muslim scholars to secure support for a conference with Jews and Christians.

Responding to media reports, the Grand Mufti said earlier this week that he had not issued any invitation to Israeli rabbis to attend any conference. But he did not say that he opposed the idea or would not invite rabbis in the future.

Fifteen of the 19 suicide bombers who carried the Sept. 11 attacks on U.S. cities were from Saudi Arabia, and al Qaeda militants launched a violent campaign to destabilise the Saudi monarchy in 2003. (Reporting by Andrew Hammond)

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