By Andrew Hammond
MANAMA (Reuters) - Bahrain lifted martial law on Wednesday in what the government hopes will be a sign to tourists and business of a return to normal, but the opposition fears repression will continue in the Gulf island kingdom.
Bahrain is especially keen to get back the Formula One race. The March Grand Prix opener was canceled because of unrest that erupted in February when pro-democracy protesters, inspired by uprisings in Egypt and Tunisia, clashed with police.
A meeting of the sport's governing body Friday could reinstate the race for later this year, but U.S.-based Human Rights Watch has said a heavy crackdown on opposition activists during 11 weeks of martial law should count in the decision.
The dusty streets of the capital, Manama, were calm on Wednesday, but in outlying Shi'ite villages there was a heavy anti-riot police presence, according to online activists. Police were checking cars around the capital and villages.
"With the end of the emergency situation, the security should not be here but they still are," said Ali Zirazdi, a 30 year-old unemployed man, who said police had fired tear gas after a few hundred people gathered in the Shi'ite village of Diraz.
King Hamad bin Isa al-Khalifa, whose Sunni Muslim family rules over a majority Shi'ite population, offered a dialogue on reform in a speech Tuesday.
"I hope the opposition joins the dialogue," said writer Taher Mohammed, 26. "I'm totally against any call for protests. It would affect all Bahrainis and it could get out of control and lead to direct clashes."
Al Jazeera television later quoted witnesses as saying police opened fire and used tear gas to disperse protesters, arresting several. It said dozens were hurt.
The Interior Ministry later denied troops had opened fire on demonstrators, the state news agency BNA reported.
Bahraini activists reported on social media that at least one person was wounded by birdshots during a protest.
The reports could not be independently verified, but reporters said empty tear gas canisters could still be seen strewn around hours later.
While the king spoke, military prosecutors summoned four members of the main opposition party Wefaq, including its leader, and rights activist Nabeel Rajab, for questioning. They were released after several hours, acquaintances said.
"The end of the national security law and announcement of dialogue are both positive. It will be a shame if anyone is negative about it," said Jamal Fakhro, a Sunni lawmaker.
"Bahrain will welcome Formula One, and any other event. There's nothing wrong with that because life is back to normal now and it will be excellent to have it back."
On a wall filled with anti-government graffiti in Diraz were the words: "If you really claim you want dialogue you have to open up the streets," and "Down with the ruling gang!"
"LOYALTY TO THE MARTYRS' BLOOD"
Bahrain, located between non-Arab Shi'ite Muslim Iran and U.S.-allied Sunni dynasties of the energy-producing Gulf Arab region, hosts the U.S. Fifth Fleet headquarters. Bahrain says Iran orchestrated the protests through links to Shi'ite groups.
Shi'ites, who make up 60 percent of Bahrain's 1 million citizens, have long complained of discrimination, lack of jobs, and representation.
U.S. President Barack Obama criticized the Bahraini crackdown in a speech this month, saying the government should begin dialogue with peaceful opposition leaders.
Activists called online for marches in Shi'ite villages and in Manama later Wednesday. Appealing to "loyalty to the martyrs' blood," one urged a return to Pearl Roundabout, where protesters camped out for over a month.
Syria lifted a decades-old emergency law to meet a demand of protesters, but that has not calmed unrest there.
With Bahrain's state of emergency over, military prosecutors can no longer call in civilians but military courts will still hear several cases started since martial law began on March 15.
Twenty-one opposition figures -- seven of whom are abroad -- are on military trial on charges of seeking to overthrow the system. Most of them are from parties that called for a republic. Rights activists say they have been tortured.
Future verdicts could lead to protests.
Sunni Islamist groups are calling for death penalties and no royal amnesty.
"No pardon for the leaders of strife, the sick elements must be uprooted" a large sign says outside the offices of Asala, one of the groups, with an image of a noose.
CAMPAIGN OF DETENTION
Since calling in Saudi and United Arab Emirates forces to help quash the protest movement, the authorities have also unleashed a campaign of detention and dismissals affecting thousands who took part, most of them Shi'ites.
Dozens of Shi'ite places of worship have also been demolished and four people have died in custody.
Rights activists say it is not clear how many remain in detention. Dozens of doctors and nurses have been arrested and health services have been purged of Shi'ite managers.
State media say medics stored weapons at Pearl Roundabout and a nearby hospital. Doctors who have been released deny this, saying they were forced to sign and record confessions.
"I expect to see a lot of gloss before the summer kicks in. There will be some reform on the surface but a hardline approach," a diplomat said. "There will be less checkpoints but you won't be able to go into the Shi'ite villages easily."
Tanks and other military vehicles were gone from outside government ministries and the financial district, but a number of small armored patrol vehicles of the Interior Ministry-run National Guard were stationed around Pearl Roundabout.
The government has renamed the roundabout the Farouq Junction, a reference to an early Islamic leader who Shi'ites consider was against their cause.
Pro-government newspapers said Wednesday that security checkpoints would be maintained permanently at some locations.
(Editing by Reed Stevenson and Elizabeth Fullerton)