By Frederik Richter and Lin Noueihed
MANAMA (Reuters) - Bahraini police blocked thousands of protesters from reaching the royal court Friday to try to defuse tension on a Gulf island where the majority is Shi'ite Muslim but the ruling family is Sunni.
Carrying Bahraini flags and flowers, the mainly Shi'ite protesters walked from the Aly area toward Riffa, a district where Sunnis and members of the Sunni royal family live. Near a clock tower in Riffa, hundreds of residents armed with clubs and knives gathered to protect their neighborhood.
More than 200 riot police armed with batons blocked off the road with barbed wire, persuading most protesters to go home.
Police pushed back a group of rock-throwing Sunnis who approached police lines and fired eight tear gas canisters to disperse Shi'ites trying to get around the roadblock.
"The royal family has lots of palaces and houses here. We're peaceful. We want to go to their house and ask for our rights," said Ahmed Jaafar, as he set off from Aly. "Power should not be with one family, it should be with the people."
Bahrain, home to the U.S. Navy's Fifth Fleet, has been gripped by the worst unrest since the 1990s when protesters took to the streets last month, inspired by uprisings that unseated autocratic rulers in Egypt and Tunisia.
Seven people have been killed in clashes with security forces and thousands of the February 14 youth movement still occupy Pearl roundabout in Manama's financial district.
Friday, several people were taken to hospital after inhaling gas but there were no serious injuries, the health ministry said.
Bahrain's interior ministry, which said there were around 8,000 protesters, denied rumors that live rounds had been used and that hundreds had suffocated from the tear gas.
"The ... operation was focused on avoiding dangerous behavior and clashes, which could impact seriously on the social cohesion of Bahrain," it said in a statement.
Moderate opposition leaders had urged hardliners to cancel the march, saying it could spark clashes between Shi'ites protesting against the government and Sunnis who support it.
Hours earlier, Bahrain's top Shi'ite Muslim cleric warned protesters not to slip into a sectarian conflict that would undermine the opposition's campaign for political reform.
"I say to all our people, Sunnis and Shi'ite, that it is forbidden to shed the blood of anyone under any pretext. We must all hold those who are inciting sectarian conflict accountable," Sheikh Issa Qassim said in his Friday sermon.
The march came on a day when rallies were planned in neighboring Saudi Arabia, the world's No. 1 oil exporter, but a heavy police presence dissuaded demonstrators there.
Both sides are watching closely, as any weakening of the government in either of the neighbors could cause contagion.
Unlike mostly Sunni Tunisia and Egypt, Bahrain is divided between Shi'ites, who have long complained of discrimination in access to jobs and services, and the Sunni minority.
Over half of Bahrain's 1.2 million population are foreigners. Bahrainis disagree on the exact figures but analysts say over 60 percent of Bahraini nationals are Shi'ite.
Moderates led by the largest Shi'ite party, Wefaq, want a government reshuffle and wide-ranging reforms and held a less provocative rally that dwarfed the march on the palace.
Tens of thousands of protesters, carrying Bahraini flags, walked from Seef Mall to the Pearl roundabout, demanding constitutional reforms that vest more power in the people.
"Oh Khalifa, we want a clean government," they chanted, referring to royal family al-Khalifa.
The coalition of much smaller Shi'ite parties behind the march on the royal court are calling for the overthrow of the monarchy and the establishment of a republic -- demands that have scared Sunnis who fear this would play into the hands of the oil-producing Gulf's main Shi'ite power, non-Arab Iran.
(Additional reporting by Warda Al-Jawahiry; Editing by Elizabeth Fullerton and Elizabeth Piper)