By REBECCA SANTANA – 23 hours ago

MANAMA, Bahrain (AP) — It seemed like a moment of reconciliation in this Gulf island nation's bitter sectarian divide, when Sunni Muslim rulers suddenly released a group of jailed Shiite activists. Shiites, who days before had been burning tires in protests, cheered in the streets.

But it was a short-lived hope. Since the activists' release a month ago, there's been no sign the government is pursuing any dialogue with Shiites.

If that doesn't change, Shiites warn, more turmoil could be ahead.

Bahrain is tiny with only 530,000 citizens in an island nation smaller than New York City. But it is a key U.S. ally, home to the Navy's 5th Fleet, in the strategic and oil-rich Persian Gulf.

It also lies on a fault line in the standoff dividing the Middle East, where Sunni Arab governments fear any sign of the growing power of Shiite Iran.

Bahrain's Shiites say they have nothing to do with Iran and are only seeking equality in a country where they are the majority. But their demands are seen by many Sunnis as a stalking horse for Tehran's regional ambitions.

"The question now that the Arab world is facing is the question of loyalty — how you identify yourself," said Mustafa Alani, a security expert at the Gulf Research Center in Dubai.

Other Arab nations with Shiite populations watch Bahrain closely. If Bahrain's sectarian divide gets out of control, it could inflame tensions in other areas where Shiites advocate for more rights such as Saudi Arabia.

"If the scale of things escalates in Bahrain, it's going to escalate elsewhere," said Toby Jones, an assistant professor of Middle East history at New Jersey's Rutgers University who studies Bahrain.

Shiites make up as much as 70 percent of Bahrain's population, according to a 2008 State Department report. But the country is ruled by a Sunni elite headed by the ruling Khalifa family.

Shiites have complained of discrimination for decades. They say Sunnis get the best government jobs and housing, while Shiites are barred from high posts in the military and security forces and suffer from higher rates of poverty.

Shiites say the situation is only getting worse. The percentage of high-level government posts held by Shiites has fallen to 13 percent in 2008 from between 25 and 30 percent in 1999, according to the Bahrain Centre for Human Rights. Wefaq, the only Shiite group in parliament, has 17 of the elected lower house's 40 seats — a low proportion that Shiites blame on gerrymandering of districts to favor Sunnis.

Far from the modern glass office buildings of downtown Manama, Shiite villages are easily identified by crumbling apartment buildings, now blackened with char marks from tires burned in recent protests. Posters of opposition leaders and graffiti bashing Bahrain's royal family plaster the walls.

Shiites also accuse the government of trying to change the sectarian balance by giving citizenship to Sunnis from Yemen, Pakistan, Syria and Jordan, a claim the government denies.

Sunnis, in turn, accuse Shiites of secret loyalty to Iran.

"The Shia — they are with Iran," said Noora al-Fadhel, a 21-year-old Sunni woman at a shopping mall. Iran, she said, is trying to stir up Shiites against Sunnis.

Ghanim Fadhul Al Buainain, a Sunni lawmaker from the pro-government Al-Asala party, contends Iran definitely has "some influence" among the country's Shiites.

Iran, which contends it has historical claims to Bahrain, hasn't helped. Earlier this year, a senior Iranian cleric referred to the Gulf island as Iran's 14th province, drawing outrage from Arab leaders. Egypt's president flew to Bahrain in support, while Morocco severed diplomatic relations with Tehran.

Shiites dispute the accusation they get orders from Iran. They point out that most Bahraini Shiites turn for spiritual leadership to Iraq's most prominent Shiite cleric — Grand Ayatollah Ali al-Sistani — not Iran's supreme leader.

But fears of Iran's influence could become a self-fulfilling prophecy, said rights activist Abdulhadi Alkhawaja. "If the ruling family keeps the same policies, cornering the Shia, marginalizing them, while Iran is gaining regional influence, there will come one day when most of the Shia in Bahrain will revert to Iran," he said.

Earlier this year, protests exploded in Shiite areas after a number of top Shiite opposition leaders were arrested. The detainees were put on trial in February, accused of seeking to overthrow the government through terrorism.

In mid-April, the king issued a surprise pardon that freed 22 of the arrested Shiites, along with around 150 other prisoners held on security charges.

Since then, however, ties have remained strained. Some Shiites say they don't think the government was seeking reconciliation, but merely wanted to quiet protests ahead of a high-profile annual Formula 1 race in April.

Nazar al-Baharna, a Shiite who serves as state minister of foreign affairs, denies any government discrimination and says protests are not the way to solve problems. "If we are a country of law, then they have to go through the proper channels," he said.

But many Shiites say frustrations are growing. Young protesters "think their future is lost before their eyes. They see themselves as without a job," said human rights activist Naji Fati.

Hassan Mushaima, leader of the mainly Shiite opposition Haq movement, among those arrested and then released in the pardon, says the activists' release is a "last chance for everybody to think really seriously about the dangers that are coming."

Copyright © 2009 The Associated Press. All rights reserved.