* Coalition shake-up under way
* Islamist is main candidate for new provisional premier
* Saudi Arabia taking more active role - diplomats (Adds quotes, Saudi role, leadership contenders)
Syria's opposition coalition will meet in Istanbul on May 23 to decide whether to participate in a U.S. and Russian-sponsored conference to try to end the Syrian civil war, coalition officials said on Sunday.
A session of the 60-member general assembly of the Islamist-dominated coalition will also elect a new head and discuss the fate of provisional prime minister Ghassan Hitto, who has come under heavy criticism for being too influenced by opposition figures with close links to Qatar, coalition insiders said.
In an effort to widen the appeal of the coalition, backed by Saudi Arabia, Hitto is likely to be replaced by Ahmad Tomaa Kheder, an independent Islamist from the eastern Syrian province of Deir al-Zor. He worked closely with liberals in peaceful opposition to President Bashar al-Assad before the war, the sources told Reuters.
"Everything will be decided in the general assembly meeting," said one of the coalition officials.
"The meeting will decide on accepting the nomination of Kheder, although Hitto is trying to hang on," another coalition source said.
In recent weeks, Saudi Arabia has increased its efforts to court the Syrian opposition as the kingdom takes a bigger role in trying to bridge differences within the anti-Assad camp, diplomats based in the region said. Together with Qatar, Saudi Arabia is the main Arab backer of Assad's foes on the ground.
A blow has been dealt to the opposition's unity by the resignation of the coalition's maverick president Moaz Alkhatib in March.
Alkhatib, who had offered Assad a negotiated exit, has been meeting the coalition's 11-member leadership committee in Istanbul over the past two days, the sources said.
The committee has so far failed to reach agreement on the peace conference, which Washington and Moscow want to hold by the end of the month.
FUTURE OF ASSAD
"Without a firm indication that the conference will be about arranging the departure of Assad, it will be impossible for the coalition to attend without losing its credibility with the people of Syria," another coalition insider said.
"On the other hand there is a feeling that the United States is going along with Russia in a last-ditch effort ahead of embarking on military action that will help remove Assad."
Among the strongest contenders to replace Alkhatib are George Sabra, a veteran Christian opposition figure who is the acting president of the coalition, and Burhan Ghalioun, a liberal professor based in France who had campaigned for democratic change in Syria since the rule of Assad's late father, coalition insiders said.
Since the coalition was set up with Gulf and Western backing at the end of last year, two power centres have emerged; the powerful Muslim Brotherhood and its allies and another faction led by the coalition's Secretary General Mustafa Sabbagh, who has close links with Qatar, opposition sources said.
A shake-up appears under way. The meeting of the general assembly on May 23 will discuss bringing in members of a secular-leaning camp currently being established in Cairo by prominent opposition figures who had previously stayed away from the coalition.
They include Michel Kilo, a writer who was jailed for three years before the revolt after he criticised repression and domination by the Assad clan.
Russia said on Saturday there was disagreement over who should represent the opposition in a Syrian peace process, days after Moscow and Washington announced the joint effort to bring the two sides to an international conference.
Moscow has been Assad's main protector and weapons supplier and says that, although it is not wedded to him, it will not allow his departure to be made a precondition of talks, as sometimes demanded by Western and Gulf powers.
U.S. Secretary of State John Kerry said on Saturday Assad's exit should be the outcome of negotiations on a transitional government, rather than the starting point.