By Alan Baldwin
(Reuters) - Formula One drivers race in Bahrain on Sunday while rage boils on the streets outside, among protesters who denounce the Grand Prix as a gaudy spectacle by a ruling family that crushed Arab Spring demonstrations last year.
In the Shi'ite villages dotted around the capital, demonstrators hurling petrol bombs have clashed nightly with police during the past week, and security forces responded with teargas, rubber bullets and birdshot.
Black smoke from burning tyres wafted over Budaiya, a village outside the capital that saw mass protests this week.
The luxury sporting event is the government's chance to show that life has gone back to normal in the island kingdom after security concerns over anti-government demonstrations forced last year's race to be delayed, then cancelled.
It appears to have backfired, with nightly TV images of streets ablaze embarrassing Formula One and the global brands that lavish it with sponsorship. Thomson Reuters, parent company of Reuters, is a sponsor of the Williams Formula One team.
The death of 36-year-old protester Salah Abbas Habib - found sprawled on a rooftop on Saturday after overnight clashes - provides more fuel for outrage among a Shi'ite Muslim majority that complains of being marginalized by ruling Sunnis.
Bahrain, a close military ally of the United States, is the only one of the Gulf monarchies to have been seriously threatened by Arab Spring protests that brought down the rulers of Tunisia, Egypt, Libya and Yemen since the start of 2011.
Its government crushed protests last year, swept demonstrators off the streets and bulldozed the traffic circle where they had camped. Thirty-five people, including security forces, died in that crackdown. Since then, Shi'ite areas have remained volatile and clashes have increased in recent months.
"Our initial demands were to elect a new government but after the disgusting abuse we received, all the people are asking for is for the regime to fall," said protester Ahmed Madani during a march of 7,000 people on the eve of the race.
Some banners held up during the march depicted Formula One drivers as riot police, bashing protesters. The march was followed by clashes in several districts which saw protesters hurl Molotov cocktails and police respond with teargas.
The Bahrain government commissioned an independent inquiry after last year's crackdown and says it is enacting reforms. Human rights groups say it is moving too slowly.
King Hamad bin Isa al-Khalifa, who will attend the Grand prix, said in a statement overnight he wanted "to make clear my personal commitment to reform and reconciliation in our great country. The door is always open for sincere dialogue amongst all our people."
'STUFF THAT REALLY MATTERS'
Staff of two teams witnessed petrol bomb-throwing incidents and some members of the Force India team left Bahrain. But most of the travelling Formula One entourage have had no interaction with the violence taking place mainly outside the capital.
Some teams have expressed frustration at the attention on politics. Red Bull's world champion Sebastian Vettel, who starts at pole position, said shortly after arrival on Thursday that he thought much of what was being reported was hype.
He looked forward to getting in the car and dealing with the "stuff that really matters - tyre temperatures, cars".
Phil Mitchell of Britain, who lives and works in Bahrain and had come to watch the event, said he was "just looking forward to a really good race today".
"There is definitely more security. But not marked. I think it's just a precautionary measure."
Bahrain's government is thought to have paid $40 million to host the event, a symbol of pride for the ruling family since it brought the first Grand Prix to the region in 2004. When it was last held in 2010, the race drew more than 100,000 visitors and generated $500 million in spending.
While motor sports journalists were invited to cover it, reporters from Reuters and some other news organizations who normally write about Middle East politics were denied visas.
Hackers brought down the F1 website intermittently on Friday and defaced another site, f1-racers.net, to support what they described as the Bahraini people's struggle against oppression.
The hunger strike of Abdulhadi al-Khawaja, one of 14 men jailed for leading last year's uprising, is further inflaming anger on the street. His health has entered a critical stage after more than 70 days. His family says he stopped taking water on Friday, raising fears for his life.
Bahrain's state news agency said in a statement that Khawaja was in "good health and stable and receiving full medical attention," citing Attorney General Abdelrahman al-Sayed, after a visit by a public prosecutor.
Khawaja also met on Sunday with the ambassador from Denmark, where he also holds citizenship, and which has asked for Khawaja to be released into their care, the agency said.
(Additional reporting by Rania el Gamal in Dubai; Writing by Isabel Coles and Reed Stevenson in Dubai; Editing by Peter Graff)