PHP works but not inside include file

[eluser]mistere[/eluser]
I have a CI 1.7.3 site that worked perfectly in Ubuntu but is now being migrated to Suse Enterprise server (SLES 11 SP1 64 bit mode).

The site STARTS working fine - until I get to the view where I include the header:
<?PHP include "header.tpl.php" ;?>
That file is included BUT the php IN THE INCLUDED FILE is not executed. I tried renaming the file and changing permissions - all without success.
For example when I want to pull in a css file the url that gets sent to the browser is:

http://server.domain/index.php/<?PHP=.../style.css

Any suggestions on how to tackle this?? I've hit a wall.

Thanks!