Protesters and police clash in Bahrain on Day of Rage

Bahraini police fired teargas and rubber bullets to break up protests on Monday in Shi'ite villages that ring the capital Manama, dampening a Day of Rage stimulated by popular upheaval in Egypt and Tunisia.

Helicopters circled over Manama, where protesters had been due to gather but which remained quiet throughout the day, and security forces tightened their grip on Shi'ite areas. More than 20 people were hurt in village clashes, witnesses said.

Bahrain, where a Sunni Muslim family rules over a Shi'ite majority, offered cash payouts in the run-up to the protest, in a move apparently designed to prevent Shi'ite discontent from boiling over as people power revolts spread in the Arab world.

In the village of Diraz, authorities dispersed with teargas about 100 Shi'ite protesters who had squared off with police, shouting slogans demanding more political rights.

We don't want to overthrow the ruling family, we just want to have our say, said Ali Jassem, married to a daughter of Sheikh Issa Qassem, a powerful Bahrain Shi'ite cleric.

Diplomats say Bahrain's demonstrations, organised on Facebook and Twitter, will gauge whether a larger base of Shi'ites can be drawn to the streets, especially in Manama. But by early evening the capital had yet to see any rallies.

We call on all Bahraini people -- men, women, boys and girls -- to share in our rallies in a peaceful and civilised way to guarantee a stable and promising future for ourselves and our children, Bahrain activists said in a statement on Twitter.

We would like to stress that February 14 is only the beginning. The road may be long and the rallies may continue for days and weeks, but if a people one day chooses life, then destiny will respond.

Analysts say large-scale unrest in Bahrain could embolden marginalised Shi'ites in nearby Saudi Arabia, the world's biggest oil exporter.

There was no immediate comment from Bahraini authorities.

NEW CONSTITUTION DEMANDED

Protest organisers said they sought the dissolution of Bahrain's constitution, to be replaced with a new version penned by a committee that includes both Sunnis and Shi'ites.

They want the country's prime minister to be directly elected by the people, and demand the release of all political prisoners, and an investigation of torture allegations.

Bahrain is a small oil-producing country whose Shi'ite population has long complained of discrimination by the ruling Sunni al-Khalifa family, well before uprisings in Tunisia and Egypt emboldened activists throughout the region.

Tension was high in Shi'ite villages on Monday.

In the village of Nuweidrat, police used teargas and rubber bullets to disperse a crowd demanding the release of Shi'ite detainees, and 10 people were hurt, witnesses said.

There were 2,000 sitting in the street voicing their demands when police started firing, 24-year-old Kamel told Reuters, declining to give his full name. Nearby, streets were littered with teargas canisters and rubber bullets.

The scene was different in Manama, where government supporters honked car horns and waved Bahraini flags to celebrate the 10th anniversary of a national charter introduced after unrest in the 1990s.

In Karzakan, where security forces regularly skirmish with Shi'ite youths, police clashed late on Sunday with residents and one person was injured, witnesses said. Police said three officers were hurt.

The cost of insuring Bahrain's 5-year sovereign debt widened by 10 basis points on Monday, according to Markit, in a sign investors were worried about stability.

King Hamad bin Isa al-Khalifa, trying to take the steam out of protests, said he would give 1,000 dinars (1,600 pounds) to each local family, and the government has indicated that it may free minors arrested under a security crackdown last year.

Non-OPEC Bahrain, which unlike Gulf Arab peers has little spare cash to use for social problems, has also said it would spend an extra $417 million (260 million pounds) on social items, including food subsidies, reversing attempts to prepare the public for cuts