RIYADH (Reuters) - Saudi Arabia risks worsening already-tense relations with its Shi'ite Muslim minority if it charges 16 detained Shi'ites with spying in a case linked to rival Shi'ite power Iran, community leaders said on Wednesday.

The government has previously blamed unrest among Shi'ites in the Qatif district of oil-producing Eastern Province on an unnamed foreign power, seen as code for Iran, a charge local activists have denied. Sixteen people have been killed in Qatif in clashes with police in the past two years.

Shi'ite activists said several members of their community had been arrested in the past four days across Saudi Arabia and their families had not been able to contact them.

Late on Tuesday the Interior Ministry said the intelligence service had detained an Iranian, a Lebanese and 16 Saudis for spying. Saudi Arabia and Iran are locked in a struggle for influence across the region.

Those detained, in the four cities where the government said it arrested the espionage suspects, included two clerics, a banker and a university professor, Shi'ite activists said. They were arrested in Riyadh, Mecca, Jeddah and Eastern Province.

"These people are not at all known as politically active. They are active only in normal religious practices. So these accusations are really strange. This whole story is damaging relations with the community," said one Shi'ite leader, Jafar al-Shayeb.

Saudi Shi'ites complain they face persistent discrimination in getting public sector jobs and worshipping freely, charges the government of the Sunni-majority kingdom denies.

Shi'ites also say they are often unfairly portrayed by officials and Sunni clerics as having loyalty to Iran.

On Tuesday the local Arab News daily reported that three Saudis had been sentenced to prison for spying on Saudi Arabia's state oil company by stealing hard drives. It was not clear whether that case was related to the alleged spy ring.

Investigators said in September that a cyber attack intended to stop production at Saudi Aramco was carried out by insiders. Aramco later linked the attack to hackers in foreign countries.

(Reporting By Angus McDowall)