DUBAI (Reuters) - A Bahraini man died on Saturday after being shot during an anti-government march a day earlier, his relative and the opposition said, blaming his death on what they described as loyalist militia members.

The government's media arm, known as the Bahrain Information Affairs Authority (IAA), confirmed that Ahmed Ismail, 22, bled to death after being shot on Friday.

Mohammed bu Daniel said his cousin was taking pictures of a demonstration when what he described as "militia members" in an unmarked car opened fire on him. "They took him to Salmaniya hospital and he was martyred there at 4:30."

Al-Wefaq, Bahrain's main opposition party said: "The details as related by witnesses and family indicate that the martyr Ahmed was near the main road with a camera in hand for documentation. Civilian police patrols were present and there were armed militias with them... One of the people in one of the cars fired live rounds into the protesters and into the air."

Bahrain, where the Sunni Muslim Al Khalifa family dominates political and economic life, has been bitterly divided since authorities quelled a mainly Shi'ite pro-democracy uprising last March. A year on, protests still flare daily in Shi'ite areas, often ending in violence.

The IAA said the case would be investigated as murder, after hearing from people close to the victim that the shots had been fired by men in an unmarked vehicle.

"The cause of death according to the medical examiner was critical bleeding due to the wound that had penetrated the upper right thigh, severing the main blood vessel and exiting the other side," it said in a statement.

The Gulf state is keen to show it is making progress on reforms it pledged to implement following international criticism of its crackdown on demonstrations, during which at least 1,000 people were detained and several died under torture, by Bahrain's own admission.

Protesters have called for curbs on the ruling family's power and an end to sectarian discrimination. A few Shi'ite groups also called for the monarchy to be replaced with a republic.

Bahrain's rulers, who invited troops from Sunni monarchies Saudi Arabia and the United Arab Emirates to help quash the uprising, have accused Shi'ite neighbor Iran of fomenting unrest. Iran denies this.

Opposition parties say government reform promises are little more than window-dressing to impress Western allies. Bahrain is due to host the Formula One grand prix in April.

Abdulhadi al-Khawaja, an activist serving a life sentence for his role in the protests, was taken to hospital on Friday, having been on hunger strike for over one month, his lawyer said.

A founder of the Bahrain Centre for Human Rights, Khawaja was convicted on charges including forming and organizing a "terrorist group" to end the Al Khalifa monarchy. Rights group Amnesty International called for his release on Friday.

"They took Abdulhadi to the hospital yesterday night, and we only found out this morning," the lawyer, Mohammed al-Jishi said. "I am in the hospital now. I'm trying to see him but until now they haven't let me."

(Reporting by Isabel Coles Editing by Maria Golovnina)