CAIRO (AP) - Saudi Arabia has dug into its oil-fueled coffers to set up a new research university, a multibillion dollar coed venture built on the promise of scientific freedom in a region where a conservative interpretation of Islam has often been blamed for stifling innovation.

The King Abdullah Science and Technology University - complete with state-of-the-art labs, the world's 14th fastest supercomputer and one of the biggest endowments worldwide - is poised to officially open its doors Wednesday on a sprawling campus nestled along the Red Sea coast about 80 kilometers (50 miles) north of the commercial center of Jeddah.

Saudi officials have envisaged the postgraduate institution as a key part of the kingdom's plans to transform itself into a global scientific hub - the latest effort in the oil-rich Gulf region to diversify its economic base.

But KAUST, whether its founders intend it or not, has the potential to represent one of the clearest fault lines in a battle between conservatives and modernizers in the kingdom.

Saudi Arabia is the most religiously strict country in the Middle East with total segregation of the sexes and practices Wahhabi Islam - a byword for conservatism around the region. But the new university will not require women to wear veils or cover their faces, and they will be able to mix freely with men.

They will also be allowed to drive, a taboo in a country where women must literally take a back seat to their male drivers.

With KAUST's inauguration, "we see the beginning of a community that is unique" in Saudi Arabia, the university's president, Choon Fong Shih told The Associated Press in a telephone interview Tuesday.

"We recruit the very best in the world .... and we give them the freedom to pursue their scientific interests," said Shih, a mechanical engineer by training who headed the National University of Singapore for nine years.

While it takes decades to develop world class institutions like what KAUST hopes to become, the university's breakneck inception in many ways reflects Saudi Arabia's rise to wealth and power in the global political and economic arena.

The inaugural ceremony is to be headed by its namesake, the Saudi monarch, as well as several world leaders, dignitaries and officials who will stand on what three years ago was just a sweeping acreage of sand, but is now a 36 square kilometer (13.9 square mile) campus with its beach on the Red Sea.

In a region where Internet access can often be lackluster, KAUSTS boasts Shaheen, a 222 teraflops supercomputer which officials says is the fastest in the Middle East and 14th fastest in the world. The computer is named after the Arab Peregrine falcon, believed to be the fastest animal on earth.

It also boasts a fully immersive, six-sided virtual reality facility called CORNEA that officials say, for example, can allow researchers to visualize earthquakes on a planetary scale.

Among the other equipment and facilities are 10 advanced nuclear magnetic resonance spectrometers, a coastal and marine resources laboratory and bioengineering facilities with labs needs to study cell molecules for DNA sequencing.

The English curriculum is focused on the sciences, with masters and doctoral degrees offered in nine fields including computer science, bioscience and various engineering specialties. The university is also focused on collaborative work with the private sector, as well as other research institutions.

KAUST has enrolled 817 students representing 61 different countries, of whom 314 begin classes this month while the rest are scheduled to enroll in the beginning of 2010. The aim is to expand to 2,000 students within eight to 10 years.

Of that total, 15 percent are Saudi, say university officials.

With research institutions, cash is king, and KAUST, thanks to Saudi's oil wealth, has plenty.

It has tossed generous salary packages to prospective hires from around the world, an offer made more tempting by a multibillion dollar endowment that Shih says is "one of the biggest in the world."

The 71 faculty members include 14 from the U.S., seven from Germany and six from Canada.

Shih did not provide a specific figure, but the funding allows all the students to receive full scholarships covering their tuition plus a stipend.

He says without that aid, students would have to pay about $60,000 to $70,000 per year.

The university is being launched at a time when the OPEC powerhouse has been upping its push to focus on education and development programs aimed at boosting economic growth.

Saudi officials have said they are committed to spending $400 billion over the next five years on various development and infrastructure projects, and the kingdom set a 2009 budget that ran a deficit for the first time in years specifically to sustain spending on such ventures.

But more than a projected research juggernaut in a region where other oil-rich nations are also embracing similar initiatives - albeit on a much smaller scale - KAUST may indirectly challenge the brand of conservatism that critics say has stifled progress in the Muslim world.

"We do not restrict how they wish to work among themselves," Shih said, referring to whether men and women can freely intermingle on campus. "It's a research environment .... driven by scientific agenda."

In many ways, the campus is similar to other Western-style compounds in Saudi where residents are often allowed more flexibility in embracing liberal Western values shunned outside the confines of their community in the kingdom.

But the university also could also be seen as a return to Islam's golden age - an era centuries ago when Muslim scholars took up the mantle of the Greeks and were pioneers in the fields of medicine, mathematics, chemistry, astronomy, among others.

This tolerant and inquiring period was snuffed out under pressure from invasions by Crusaders, Mongols and nomadic desert hordes in the Middle Ages and was replaced by an age where faith superseded reason amid unstable times.

In the modern era, bureaucratic bungling, a lack funds, and a general stifling of freedoms has left much of the Arab Middle East in a state of academic and scientific atrophy.

Officials say KAUST's embrace of scientific freedom marks Saudi Arabia's determination to not be left behind as technology increasingly drives global development.

"In a way, we are paving the way," said Shih, referring to the university's focus on pure science. But if "KAUST is leading the way, it has to meet global standards of excellence, otherwise how else can we be a global player."