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MANAMA (Reuters) - On the wall of a home in the Bahraini village of al-Aali, 20-year-old Hassan peered through a black balaclava to admire his latest artwork: a circle around the phrase F1 crossed out in red spray paint.
The sentiment is shared by many Bahraini Shi'ites - the majority in this Sunni-ruled kingdom - who say the Formula One Grand Prix race Bahrain will host April 19-21 should be canceled, as it was in 2011 when authorities crushed pro-democracy protests inspired by the 'Arab Spring'. Two years on daily clashes still erupt, largely unnoticed outside the region.
The race will once again draw international attention to Bahrain. The 2012 meeting was accompanied by nightly skirmishes between protesters and security forces. This year, says Formula One boss Bernie Ecclestone, the signs are that tensions in the kingdom have eased and the risk of protests has diminished. That's a view opposition activists reject.
"Of course we're against it," said Amani Ali, a 22-year-old university student dressed in the black garb typical of conservative Shi'ite women, standing a few meters from Hassan at the first of a series of opposition-organized marches.
"The race brings money to the regime, which they use to buy weapons and attack us.
Many of the companies who help to finance Formula One are limiting their sponsorship involvement, although the firms, including Vodafone and Diageo, say the reasons are operational, not political. Formula One makes most of its money from hosting fees paid by race venues and from television rights. Bahrain pays an estimated $40 million annually to be part of the 19-race calendar.
Home to the U.S. Navy's Fifth Fleet, Bahrain has faced unrest since pro-democracy protests broke out in February 2011, pitting a Shi'ite-dominated opposition against the minority Sunni-led government, led by the Al Khalifa family.
The protest was crushed, dozens of people were killed and authorities razed "Pearl Square" where mostly Shi'ite demonstrators camped out in central Manama in 2011.
Now weekly sessions of a reconciliation effort between government and opposition known as the "national dialogue" take place outside Manama. But daily confrontations between stone-and-petrol-bomb throwing youths and birdshot-and-teargas firing police reflect a bitter political atmosphere.
Watched by millions around the world, the Grand Prix is the biggest sporting event hosted by Bahrain and authorities are eager to showcase Bahrain in its best light.
The protesters know the race will not be canceled. They feel there is an opportunity to use the media spotlight to highlight what they say are injustices still being committed against them.
The Shi'ite majority complain of discrimination in jobs and government while their loyalty in turn is questioned by members of Bahrain's Sunni ruling family, bound by historical and marriage ties to neighboring Saudi Arabia.
For the most part, the opposition feels the West and friendly Sunni-ruled Arab states are ignoring their plight, as more horrific headlines from the civil war in Syria and Egypt's major economic problems dominate media coverage.
"People are getting killed. They (the government) wants to show that there's nothing wrong in Bahrain," said Hassan, at the same protest in al-Aali in which thousands were calling for greater freedoms and for the downfall of the king.
A drive through the capital Manama and nearby rich suburbs showcase multi-lane highways, glittering five-star hotels, business towers and billboards advertising concerts.
It is impossible to ignore the omnipresent pictures of the top three royal figures: King Hamad bin Issa al-Khalifa, Prime Minister Sheikh Khalifa bin Salman al-Khalifa and Crown Prince Salman al-Khalifa plastered on malls, schools and billboards across the city.
But a few minutes drive into poorer Shi'ite villages, and the skyscrapers are replaced by simple homes, many displaying graffiti that says "Down with Hamad", "The people want the downfall of the regime", and "Death to the Al Khalifa family".
National dialogue talks that began in February have been in deadlock as both sides accuse each other of intransigence.
The tensions reflect the sectarian faultline in which Shi'ite Iran and Sunni Saudi Arabia are vying for influence in a region where traditional alliances are being recalibrated in the aftermath of the Arab Spring.
The government denies opposition allegations of arbitrary arrests and abuse by security forces.
Last month, Hussein, a protest leader, said a group of men accosted him as he drove in his car late at night, and beat him.
"They told me say 'Long live the King'," he said. The men asked him if he participated in protests to which he replied that he joined government authorized ones. The men forced him to strip to his underwear and asked him the same question to which he gave the same reply. They then stripped him completely and asked him whether he would join protests, to which he replied no. "This time we'll let you go," he said the men told him.
Information Minister Samira Rajab denied security forces would have carried out such an action.
On many evenings youths block roads with palm tree trunks and couches, burn tires and throw petrol bombs and iron rods at police forces who fire teargas and bird shot bullets.
Against the backdrop of low-grade violence, Western diplomats acknowledge the challenge posed to the dialogue talks but hope they will eventually progress.
"There's a lot of mutual suspicion and they have to get through that," said a Western diplomat in Manama."But both sides recognize that 'We need a dialogue'. I'm reasonably confident that this dialogue will yield positive results. This is not a country in crisis, not a country on fire."
additional reporting by Keith Weir; editing by William Maclean and Janet McBride