Shi’ites staged a protest in Saudi Arabia’s oil-producing Eastern Province on Thursday, demanding the release of prisoners they say are being held without trial, witnesses said.

Mostly young men marched through the small town of Awwamiya, near the Shi’ite centre of Qatif on the Gulf coast.

“Peaceful, peaceful,” the demonstrators shouted, holding up pictures of Shi’ites they say have been long held without trial, while policemen stood by without interfering.

Last month, Saudi authorities released three prisoners after a previous protest by Shi’ites in Awwamiya.

“They demand the release of prisoners, only this,” Zaki al-Saleh, an Shi’ite activist and resident told reporters, although he did not participate in the demonstration.

A group of women also followed the protest.

Saudi Arabia is an absolute monarchy without an elected parliament that usually does not tolerate public dissent.

Saudi Arabia’s Shi’ite minority mostly live in the Eastern province, which holds much of the oil wealth of the world’s top crude exporter and is near Bahrain, scene of protests by majority Shi’ites against their Sunni rulers.

Saudi Arabia applies an austere Wahhabi version of Sunni Islam and Shi’ites say that, while their situation has improved under reforms launched by King Abdullah, they still face restrictions in getting senior government jobs.

The government denies these charges.

The demonstration was much smaller than protests staged in Awwamiya in 2009 after police launched a search for firebrand Shi’ite preacher Nimr al-Nimr, who had suggested in a sermon that Shi’ites could one day seek their own separate state.

The secessionist threat, which analysts say was unprecedented since the 1979 Iranian revolution, provoked anti-government protests, and was followed by clashes between the Sunni religious police and Shi’ite pilgrims near the tomb of Prophet Mohammad in the holy city of Medina.

Since then, Shi’ites say the situation has calmed down but they are still waiting for promised reforms to be carried out.

They hope that the jasmine revolution will spread to the rest of the Middle East, bringing some sort of democracy throughout the region. However, there is one huge difference between North Africa and the Persian Gulf. Tunisia, Egypt and Libya are all Sunni-majority states ruled by Sunni autocrats. But it may surprise readers to learn that the Persian Gulf coast is entirely a Shia majority area, much of which is ruled by Sunni autocrats. Hence popular revolts in the Gulf nations may or may not evolve into democracy, but will certainly evolve into Shia-cracy. This terrifies the Sunni rulers.

Arabs hate the term “Persian Gulf” and call that body of water the “Arabian Gulf.” Yet the most appropriate name may be “Shia Gulf”. The Shias in the north coast of the Gulf are Persian and those in the west and southern coasts are Arab, but all are Shia regardless.

Iran and Iraq are Shia-majority countries where Shias are in power. But in other Gulf countries, the Shia majority is ruled by Sunni sheikhs— in Kuwait, Bahrain and the United Arab Emirates. Even the Gulf coast of Saudi Arabia (which produces and exports most of its oil) has a Shia majority, although the country overall has a Sunni majority. The Saudi king has one big advantage over other Sunni rulers of the region: he is revered by all Muslims, Shia or Sunni, as the guardian of the holy cities of Mecca and Medina. This makes Saudi Arabia less vulnerable to a popular Shia revolt than Bahrain (where demonstrators are already choking the streets), Kuwait or the UAE. Yet the Saudis are paranoid because all their oil lies in the Shia-majority eastern region.

This is why the Saudi king has just announced that he will spend a whopping $ 11 billion on improving welfare and housing in the Shia-majority region. He wants to buy off potential revolutionaries. Whether he will succeed remains to be seen: Bahrain’s Shia demonstrators have refused to be bought off with grants of $ 2,250 per head. Some months ago, the WikiLeaks of US confidential diplomatic papers revealed that many Gulf sheikhdoms—including Bahrain and the UAE—wanted the US to bomb Iran’s nuclear facilities. The sheikhs claimed they feared armed invasion or bombing by Iran. In fact, their real fear is that a rising Iran will induce their own Shia subjects to revolt and demand democracy. The Sunni sheikhs have long cultivated the US to keep Iran at bay. But this simply induces disgust on the part of many Shia subjects, who view their rulers as not just Sunni oppressors but American stooges too. Bahrain is a small island off the Saudi Gulf coast, linked to it by a motorable causeway. Whereas Saudi Arabia is an ultra-conservative Muslim state where women must wear burqas and are not even allowed to drive cars, Bahrain is a freewheeling, westernized state where women can wear short skirts and dance all night in nightclubs. It has an elected lower house, but real power vests with the king. The democracy movement in Bahrain started off as a secular one, yet inevitably became coloured by the Shia-Sunni split.

Some analysts hope for a peaceful transition from autocracy to democracy in the Middle East. Muslim autocrats have sometimes evolved into leaders of political parties in democracies. Two examples are Gen Zia-ur Rahman in Bangladesh and Gen Pervez Musharraf in Pakistan. It is just possible that some such transition could occur in North Africa too. But this will be impossible in the Gulf, since any political party formed by the Sunni rulers will be thrashed by Shia rivals. Hence Gulf sheikhdoms are more likely to opt for the Gaddafi path of bloody suppression than the Mubarak path of exiting in favour of democracy.

This creates a moral and financial dilemma for the US. It swears in theory by democracy, but in practice dreads the replacement of Sunni sheikhs by Shia-cracies in the Gulf. It also fears that Shia revolts in the Gulf may disrupt oil supplies and send prices soaring, above all if the democracy fever spreads to Saudi Arabia.

Iran loves the thought of a completely Shia Gulf. But it also fears that its own theocracy could be toppled by a democracy movement, and that tempers its enthusiasm for the jasmine revolution. When democracy seems inconvenient to so many powerful forces, its prospects in the Gulf cannot be too bright. Its prospects in North Africa are much brighter.

Leading intellectuals in Saudi Arabia have warned that grand financial gestures are no substitute for meaningful political reform, after King Abdullah unveiled a $36bn (£22bn) social welfare package in advance of planned anti-government protests next month.

In a statement released on Thursday, a group of Saudi scholars called on the royal family to learn from recent uprisings in the Gulf and North Africa and to start listening to the voices of the kingdom’s disenfranchised young people, some of whom are planning a “day of rage” on 11 March. Several Islamic thinkers, as well as a female academic and a poet, are among those adding their names to the declaration.

“The Saudi regime is learning all the wrong lessons from Egypt and Tunisia,” said Shadi Hamid, director of research at the Brookings Doha Centre. “The unrest in the region is not fundamentally economic, it’s fundamentally about politics. Economics plays a role but what the events of the past few months have shown us is that Arabs are looking for freedom, dignity and democracy – and if the Saudi leadership can’t see that, then they’re in trouble.”

Saudi Arabia’s 86-year-old monarch returned home this week from three months in hospital abroad, and immediately announced a vast package of welfare measures including new education and housing subsidies, the creation of 1,200 jobs and a 15% pay rise for all government employees.

But analysts believe the king – who promised far-reaching political reform when he ascended to the throne in 2005, only to make little effort in tackling the political status quo – has misjudged the grievances of his population.

The kingdom remains an absolute monarchy with few outlets for dissent, with public policy-making concentrated almost entirely in the hands of the ruling family.

“We’re seeing a lack of vision on the part of Saudi leaders right now,” said Hamid. “They’re trying to bribe people into quietude. It’s cynical, predictable, and it’s not necessarily going to work, at least in the long run – I don’t believe anyone thinks Saudi Arabia is going to fall tomorrow, but it’s not immune from unrest. It’s actually quite surprising that King Abdullah hasn’t taken this opportunity to move faster on political reform.”

Despite its oil wealth, Saudi Arabia features many of the underlying demographics that have helped spark rebellions in other Arab nations. Almost half the population is under the age of 18 and, unlike in other Gulf states, some of which boast close to full employment, 40% of 20- to 24-year-old Saudis are out of work.

Many young people are turning to online social media sites to exchange information and ideas.”The level to which young people in Saudi Arabia are connected to the rest of the world, and particularly the Arab world, is staggering,” Mai Yamani, a prominent Saudi author, told the Guardian.

“The flow of ideas being shared amongst this generation has no borders. The same anguish and demands being voiced by Arab youth elsewhere is inspiring youth in Saudi Arabia as well. In this climate, the days of using oil money to secure the subservience of citizens is over.”

So far the announcement on Facebook of a day of protest next month has been met with little open enthusiasm; in contrast to similar calls in Egypt and Tunisia which garnered tens of thousands of supporters, the Saudi web page is followed by only a few hundred supporters.

But in a kingdom where the current laws and social mores work predominantly to the benefit of ethnically Saudi males following the Sunni branch of Islam, some analysts have estimated that up to 20 million of the kingdom’s 27 million people – including women, Shia Muslims and some 7.5 million guest workers from Asia – feel dangerously detached from the state, amounting to a potentially potent groundswell of opposition.

“Saudi Arabia has had an undercurrent of unrest and anger towards the regime for decades now, it’s always been there bubbling underneath the surface,” claimed Hamid. “The question is when it’s going to explode.”

But he added that calls for a complete overhaul of the monarchy remained unlikely. “We have two regional models of change: one is the Egyptian, Tunisian and Libyan model of overthrowing the regime, and the other is the Moroccan and Jordanian model of shifting from an absolute to a constitutional monarchy, and that applies to Saudi Arabia as well. I don’t think there’s a hunger for a complete break in the system.”

As political unrest shakes its tiny Gulf ally Bahrain, much more is at stake for the United States than just the fate of the US Fifth Fleet’s base, analysts said.

Also in play are Washington’s extensive strategic ties with Bahrain’s influential oil-rich neighbor Saudi Arabia and efforts by US arch-foe Iran to spread its influence from across the Gulf, they said.

In many ways, the unrest in Bahrain “is much more dangerous” for the US than the current state of affairs in Egypt, more than a week after mass protests forced president Hosni Mubarak to step down, said analyst Aaron David Miller.

To be sure, Egypt has greater weight than Bahrain, said Miller, a former State Department analyst and negotiator who is now an analyst with the Woodrow Wilson International Center for Scholars.

It is the largest and most powerful Arab state, has a peace treaty with Israel and receives $1.3 billion in US military aid each year.

And the Egyptian-US alliance remains intact, at least for now.

However, Bahrain’s vulnerability “to more convulsive change and the impact that it could have vis-a-vis Arab policy for Iran, Saudi Arabia and the rest of the Gulf makes it … a more hot-button issue right now,” Miller told AFP.

The Sunni Arab leaders of Bahrain and Saudi Arabia, who govern over restive Shiite Arab populations near Shiite but non-Arab Iran, fear Washington’s push for reform will sow greater instability, said analyst Patrick Clawson.

They strongly opposed Washington’s pressure on Egypt for a transition to democracy to ease out Mubarak, according to Clawson, deputy director for research at the Washington Institute for Near East Policy.

“The perception in the (Gulf) region is that democracy means either the complete chaos you had in Iraq or else the stasis and bickering you had in Kuwait,” he said.

And if needed, the Saudis may be prepared to repeat their intervention in Bahrain in the 1990s, when they sent armored personnel carriers across the causeway linking the neighbors.

“So the Saudis are in a position to ensure that things don’t get out of hand in Bahrain and they are of a mind to do that. That is a powerful constraint to what the United States can do under these circumstances,” Clawson said.

The course of events could put a strain on the US-Saudi strategic relationship, which involves US military bases and billions of dollars in US weapons sales, as well as close cooperation on regional diplomacy and counter-terrorism.

Bahrain, fearing Iran’s meddling, may continue taking a tough line toward unrest, although Bahraini security forces withdrew Saturday from a Manama square that had been the focal point of bloody anti-regime protests.

The implications of the apparently conciliatory move were not immediately clear.

“The Gulf rulers will be petrified that there is an Iranian influence in all of this, but I think the Iranians will be pretty incompetent” in trying to gain influence in the region, Clawson said, noting that will not prevent them from making a “good attempt” to do so.

What’s more, he said, Arab Shiites increasingly look to their own leaders rather than Iran for guidance.

Nonetheless, analysts expressed concern about Iran.

“The issue of Iran is critical. What is a good outcome for us?” Miller asked.

“Here you have Iranian access to that Shia majority. You could argue that an Iraq-like outcome is not out of the question,” he continued, referring to how Shiites now dominate affairs in Baghdad with some backed by Iran.

Michelle Dunne, a former Middle East specialist at the State Department, agreed that the Saudis would have a hard time accepting political change in Bahrain and that the Iranians would try to exploit instability there.

“The Bahraini problem is definitely a home-grown problem,” said Dunne, now a senior associate with the Carnegie Endowment for International Peace.

“This is not Iran manipulating the politics of an Arab state, but the Bahraini Shia are desperate. They will accept support from where they can get it.”

As for the naval base, analysts said its presence is not currently the focus of Shiite-driven protests, though it could develop as such if protesters eventually succeed in changing the government.

“At some point, that’s going to be rethought… whether it’s appropriate to have a US naval base there or not,” said Dunne.

Anthony Cordesman, a former Defense Department intelligence analyst, said the US base in Bahrain is “very important” in light of the “steady buildup” by the naval branch of Iran’s Revolutionary Guards over the past decade.

Demonstrators clashed with security forces in Bahrain and Yemen, emboldened to challenge ruling regimes by the success of Egypt’s populist uprising against President Hosni Mubarak.

Bahraini riot police fired tear gas to break up protests across the island nation, and one man reportedly was shot dead by police, as demonstrators demanded more political freedom and jobs. Yemeni protesters announced plans for a fifth day of demonstrations after thousands gathered yesterday at Yemen’s Sanaa University to demand President Ali Abdullah Saleh step down, clashing with police and pro-government demonstrators who hurled stones and wielded clubs.

“Each country has its own unique circumstances,” said Alireza Nader, an international policy analyst at the Rand Corporation’s Washington office and a former Middle East specialist at the U.S. Treasury Department. “But whether it’s Persian Iran or Arab Yemen or Bahrain, all those countries are vulnerable to social unrest.”

Oil Region

The anti-regime turmoil is entering a new stage as it moves from the Arab world’s most populous nation to the Persian Gulf region, an area of vital importance to the U.S. and other industrialized nations because it holds more than 50 percent of the world’s oil reserves.

The regional uncertainties were reflected in the cost of insuring debt sold by the government of Bahrain, which rose 11 basis points yesterday to 248, the highest since Feb. 4, according to CMA prices for credit-default swaps. Still, oil tumbled in New York to the lowest level since November amid an abundance of fuel in the U.S. and as tensions eased in Egypt. Crude oil for March delivery fell 77 cents to settle at $84.81 a barrel on the New York Mercantile Exchange, the lowest level since Nov. 30.

Shock Waves

The Arab world has been shaken over the past two months by anti-government demonstrations over economic hardship and corruption that drove Tunisian President Zine el Abidine Ben Ali from office on Jan. 14 and forced Mubarak to resign and cede his presidential powers to Egypt’s armed forces on Feb. 11.

In Algeria, where opposition leaders are planning further protests after violent clashes Feb. 12 in Algiers, Minister of Foreign Affairs Mourad Medelci told Europe 1 the government may lift a 19-year-old state of emergency in the next few days. President Abdelaziz Bouteflika said on Feb. 3 that demonstrations, banned under the state of emergency since 1992, would be permitted, except in the capital, according to the state-run Algeria Presse Service.

Facebook Protests

A group called “the Revolution of 14th February in Bahrain” used Facebook to promote the protests yesterday and has more than 13,400 followers on the social-networking website. The date marks the anniversary of the establishment in 2002 of a second constitution, which provided an elected parliament in Bahrain, home to the U.S. Navy’s Fifth Fleet, and made the kingdom a constitutional monarchy.

“Bahrain, of any Gulf state, is the most susceptible because of the deep grievances of the majority Shiite population” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “The Shiite population is excluded from many types of government employment and municipal services in Shiite villages are below standards in other Sunni neighborhoods.”

Protesters and police battled into the night in the alleys of Diraz, on the northwest coast. Shiite Muslim protesters threw rocks and built barricades of wood and cement blocks, while police fired tear gas and sound grenades.

Tear Gas

“We were starting our peaceful protests when riot police attacked us with tear gas,” Nabeel Rajab, head of the Bahrain Center for Human Rights, said in an interview after the protest in Bani Jamrah was dispersed. “We will continue our protests until the government hears our demand.”

A man was shot dead by police during the protests, said Matar Ebrahim Ali Matar, an al-Wefaq party member on the Council of Representatives. Earlier yesterday, residents of the Shiite Muslim village of Nuweidrat said clashes broke out between activists and police after morning prayers.

Bahraini Shiites, who represent between 60 and 70 percent of the population, say they face job and housing discrimination by the government. Bahrain’s royal family has close ties with Sunni-ruled Saudi Arabia, the largest Arab economy. Many among Bahrain’s populace retain cultural and family links with Shiite- dominated Iran, Saudi Arabia’s main regional rival.

Deep Pockets

King Hamad bin Isa al-Khalifa, who is Sunni, ordered an increase in food subsidies and social welfare payments as the government sought to ease the burden of rising food prices, the Bahrain News Agency said Feb. 3. He also ordered the payment of 1,000 dinars ($2,653) to each Bahraini family.

In Yemen, an impoverished nation at the southern tip the Arabian Peninsula, protesters yesterday continued to press their demand that Saleh, 68, who has ruled for 32 years, step down. His recent promise not to run for re-election when his term is up in 2013 has not slowed the opposition.

They chanted “Down, down with Ali, long live Yemen” as police formed a human shield to keep crowds from spreading. At least 17 people were injured and 165 detained in Sanaa, Xinhua news agency reported, citing witnesses. Ghazi al-Samee, 31, one of the protesters in the southwestern city of Taiz, said eight people were injured yesterday and that more than 30 people were arrested.

Unlike Bahrain, the Yemen government can’t afford to try to buy calm by offering economic benefits. Yemen faces serious water shortages, declining oil output and a society where more than half the population of 23 million is under 20 years old. About 40 percent of Yemen’s population lives on less than $2 a day.