Manama, Bahrain David E. Miller – Bahrain’s efforts to restore peace and prosperity received twin blows over the weekend as opposition forces staged their first rally since martial law was lifted and the governing body of world Formula One racing rescinded a decision to hold the Bahrain Grand Prix in October.

A mass demonstration by the country’s majority Shiites on Saturday was peaceful. Under the slogan “Bahrain, a homeland for all,” thousands of protesters gathered in the Shiite city of Sar to demand political reforms and a more democratic legislature. But human rights activists warned that the rally was organized by moderates and that demands for more far-reaching reforms would be testing the government’s tolerance.

“There are opposition groups that demand to topple the regime and others that demand reform. Al-Wefaq demands reform,” Nabeel Rajab, president of the Bahrain Center for Human Rights told The Media Line, adding that more radical oppositionists were still held in prison.

A day before the rally, Bahrain’s most senior Shiite cleric, Sheik Isa Qassim said Friday there is no chance for talks with the nation’s Sunni rulers so long as security forces maintain their clampdown on protests. “We cannot negotiate in such conditions,” Sheik Qassim told worshippers in a mostly Shiite area outside the capital of Manama, according to the Associated Press.

King Hamad Al-Khalifa is in a delicate position. While many in his government feel threatened by what they say is Iranian interference aimed at toppling his Sunni regime, Bahrain is under pressure from the U.S. and from human rights groups to end the wave of arrests and summary justice. Those concerns could jeopardize Bahrain’s role as a regional financial center.

Speakers at Saturday’s rally made a special effort to emphasize national unity and disregard sectarian divisions, and Bahraini police responded in kind by not intervening to quell the protest.

In an effort to assuage government concerns about covert Iranian involvement with the opposition and charges of dual loyalty, a banner posted Sunday on the Facebook page of Al-Wefaq, the country’s main Shiite opposition group, declared, “Sunni and Shiite Brothers, we will not sell our nation.” and “Come, my dear Sunnis, let us join hands and develop our political structure and safeguard the future of our children.”

“Today, everyone is talking about reform,” Jasim Hussain, a former parliament member for Al-Wefaq, which organized Saturday’s rally, told The Media Line. “There are serious efforts to bring things back to normal.”

King Hamad imposed martial law on March 15, one day after he called in a Saudi-led Gulf force to crush weeks of protests. At least 30 Bahrainis were killed and thousands injured in clashes with the army. The Saudi troops remain and many opposition leaders remain jailed, but martial law was formally lifted June 1.

And, in an effort to show he is talking with the opposition rather than just suppressing it, a day before he lifted martial law, the king announced the formation of a national dialogue committee.

While protestors were calling for democratic reforms during the weeks of protests, the opposition was mostly Shiites, who constitute about 70 percent of the island kingdom’s population but face discrimination in jobs, housing and political power. Shiite leaders vehemently deny the charges that they are allied with Shiite Iran.

“The opposition isn’t calling for the establishment of a state similar to Iran, but for the participation of everyone in reform for the sake of Bahrain,” Sheikh Ali Salman, leader of Al-Wefaq, announced during Saturday’s rally.

Rajab said the opposition still demands the government refurbish Shiite mosques damaged during the riots and release political prisoners, incorporating them in the process of national dialogue.

King Hamed on Saturday appointed parliament chief Khalifa Dhahrani to head the national dialogue with the opposition, set to begin on July 1. But Al-Wefaq said it opposed the nomination.

“The real dialogue to take place with the opposition should be conducted by the king or the crown prince,” Al-Wefaq parliament member Khalil Al-Marzouq told Reuters. “The dialogue in question is a central point of contention between the royal family and the people.”

Rajab, the human rights activist, agreed that nominating Al-Dhahrani bode ill for the government’s seriousness.

“The parliament doesn’t represent the people,” Rajab said. “The nomination of the head of such a controversial institution sends a negative message about the legitimacy of this dialogue.”

Meanwhile, Bahrain Grand Prix – an annual event that the government uses to showcase the kingdom – has stalled. The race, traditionally held in March, was canceled in the face of the mass protests that paralyzed the kingdom. But soon after martial law was imposed, officials began lobbying to reschedule the event.

Formula One czar Bernie Ecclestone supported a proposal for a rescheduled October race, but the organization representing 11 of the 12 racing teams said they opposed the reinstatement. In a statement, they said their opposition was based on logistical and insurance grounds rather than human rights concerns.

Nevertheless, the reversal strikes a blow to the economy both in terms of lost revenue from spectators and other tourists and to the country’s image.

Unnamed Bahraini businessmen expressed their disappointment at the decision. They told the Bahraini daily Al-Watan on Sunday that the country stood to loose between $300 million to 500 million as a result of the cancelation.

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