Daily street clashes, a jailed activist on hunger strike and opposition calls to cancel the event have raised uncertainty over the long-planned race, while organisers and the Bahraini government appear set on going forward and keeping things calm.

A big test will be whether street clashes after Friday prayers will spook the Formula One's governing body and commercial chief Bernie Ecclestone, who are expected to decide over the weekend. Bahrain's government, which could also call off the race, has given no signs of doing so.

Ecclestone hinted that the matter was all but settled.

"The race is on the calendar, it's scheduled. The only people that can do anything about it is the national sporting authority in the country that can ask for it to be withdrawn from the calendar," he told Reuters at the Chinese Grand Prix in Shanghai. "Unless it gets withdrawn by the national sporting authority in the country, then we'll be there."

At stake is not just a race that in 2010, when it was last held, brought in more than 100,000 visitors and half a billion dollars in spending to Bahrain, but the country's pride in being the first in the Middle East to host Formula One in 2004.

Bahrain's Sunni Muslim rulers are eager to bring back a successful race as part of their efforts to show progress on reconciliation and reform with a majority Shi'ite community that led anti-government protests last year.

Crown Prince Sheikh Salman bin Hamad al-Khalifa initiated the race in Bahrain and is also its honorary president.

Last year's race was delayed, then ultimately cancelled, just after the peak of the February-March revolt by mostly Shi'ite pro-democracy demonstrators demanding a greater say in government and better access to jobs and housing. Bahrain's monarchy quashed the revolt with the help of security forces from Saudi Arabia, and more than 30 people died.

A final decision on whether to go forward is due this weekend at the Chinese Grand Prix. The Bahrain leg of the Formula One circuit is to follow on April 20-22.

"Friday's always the busiest day of protests (in Bahrain)," commented one racing team member, who like many others did not want to be named. "So Saturday could be a likely day for any emergency meeting."

Among the teams, McLaren has particularly close ties to the Gulf Arab kingdom. Bahrain's sovereign wealth fund Mumtalakat owns 42 percent of the McLaren Group and 50 percent of its automotive wing.

GREEN LIGHT?

Circuit officials said preparations are fully under way and there was no reason to think the race would not proceed at the Bahrain International Circuit, built in Sakhir at a cost of $150 million.

"We are satisfied the sport's governing body, the FIA, is satisfied and the commercial rights holders are satisfied that a safe and successful event can be achieved," said Jassim Albardooli, a spokesman for Bahrain International Circuit.

"From the cars and tools to the TV cameras and vending area performers, everything will be here and ready. Only the question of whether the team personnel will come to Bahrain is, according to reports, what is up for debate."

In Bahrain as in other Muslim countries, the time after midday Friday prayers is when people, who are off work due to it being a weekend day, congregate after visiting mosques and this has frequently provided the spark for street protests.

Another factor will be the health of jailed rights activist Abdulhadi al-Khawaja, on hunger strike for two months. Khawaja, who also holds a Danish passport, was moved to a military hospital this week and declared by the government to be in stable condition, although supporters say he is close to death.

Daily protests continue in mainly Shi'ite towns and villages while a heavy police presence has kept them out of the capital Manama. Racing organisers have promised low-key and discreet policing and said there was no reason for the Grand Prix to be postponed.

On Monday, several policemen were injured by a bomb explosion during a protest in a Shi'ite village. Then gangs of young men attacked cars and tried to march on a neighbouring Shi'ite district after a Sunni-led rally protesting the bombing, in a sign of the potential for escalating tit-for-tat violence.

Circuit Chairman Zayed Al Zayani - who says the race contributes $220 million directly to the local economy and $400 million to $500 million indirectly - accused "certain small extremist groups" of distorting the situation in Bahrain on social networking sites.

Opposition campaigners want the glamorous big-money race cancelled, criticising it as a "tool of repression" at a time of sharp sectarian divisions and street violence in Bahrain.

But Al-Wefaq, Bahrain's largest opposition group, said that while it did not like the idea of Formula One's return, it did not see any point in trying to disrupt the event.

"We know this regime will use F1 to say Bahrain is back to normal. It is part of their propaganda," said Mattar Mattar of al-Wefaq and a former member of parliament. "We're not in favour of any type of disturbance. If it goes forward we are going to use the event and media attention to speak out."

CALLS FOR CALM

John Yates, a former assistant commissioner of the British metropolitan police who was hired by Bahrain to oversee reform of its police force, wrote to the head of the International Automobile Federation FIA.L saying that Bahrain was safe and that portrayals of current protests were overblown, although he admitted that there was ongoing unrest.

"The almost nightly skirmishes that take place in certain villages are a potential block on progress and are putting those involved in their policing and innocent members of the public in significant danger," Yates wrote in a letter to FIA President Jean Todt, obtained by Reuters on Thursday.

"However, in spite of how these events may be portrayed through the medium of Youtube and other outlets, their significance should not be overplayed," Yates said. "Along with my family, I feel completely safe. Indeed, safer than I have often felt in London."

In the run-up to the final decision, the United States repeated its call for a halt to violence by all sides in Bahrain and said it was concerned for the well-being of Khawaja.

Bahrain is of particular strategic importance to Washington as the home for the U.S. Fifth Fleet and because of its location on the Gulf close to U.S. adversary and Shi'ite power Iran.

"The United States continues to be deeply concerned about the situation in Bahrain, and we urge all parties to reject violence in all its forms," Jay Carney, press secretary for U.S. President Barack Obama, said in a statement.

He condemned violence "directed against police and government institutions" and also "excessive force and indiscriminate use of tear gas against protesters" by security forces.

(Additional reporting by Isabel Coles in Dubai; Writing by Reed Stevenson; Editing by Mark Heinrich)

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