RIYADH, Sept 23 (Reuters) - Saudi reformer prince Talal bin Abdul-Aziz says political parties are needed to end "marginalisation" in the conservative kingdom, adding to a tense debate about reform in the world's biggest oil exporter.

The Web site of Prince Talal (www.princetalal.net) said in a statement, first released over a week ago, that a minority had monopolised power in the kingdom, a key U.S. ally and home to Islam's holiest sites, but reform would need the king's consent.

"Ending marginalisation requires a (political) party, if King Abdullah in his wisdom wishes to strengthen the trend he began towards consultation and participation," it said, clarifying comments the prince made on an Egyptian satellite television channel earlier this month.

"He said that setting up a party depends on the approval of the king," it added, quoting the prince, who is the father of billionaire entrepreneur Prince Alwaleed.

Saudi Arabia has no parties or elections to its advisory parliament, street protests are banned, political life is dominated by the ruling Al Saud family.

Reform advocates were detained in February for what the authorities said was suspicion of funding Iraqi insurgents, but lawyers and colleagues of the men say the arrests were in fact designed to scupper plans to set up a political party.

Prince Talal is one of the few surviving sons of Saudi Arabia's founder, whose living half-brothers include King Abdullah, Crown Prince Sultan, Interior Minister Prince Nayef and Riyadh governor Prince Salman.

He is thought to be a member of a "family council" that takes key decisions in the vast royal family, but he has had little influence since the 1960s when tried to lead a political reform movement in alliance with Egypt's President Nasser.

King Abdullah is viewed by many Saudis as a supporter of some political reforms but diplomats say his room for manoeuvre is restricted by opposition from his conservative brothers.

AlertNet news is provided by