Bahrain is braced for a fresh bout of violent repression as new arrests and the alleged death of a female student fuel sectarian tensions in the tiny Gulf state.

Armoured vehicles and security forces were reported to be gathering in the streets of the capital, Manama, and in surrounding suburbs and villages.

Meanwhile, evidence has emerged that Saudi forces have been involved in violence against the opposition in the mainly Shia villages and suburbs around Manama. In a graphic eyewitness account of the repression given to the Observer, a Bahraini who has been caught up in the violence claimed that officers with Saudi accents, in plainclothes but armed with automatic weapons, had led attacks on members of the Shia opposition on several occasions over the past month.

When Saudi and UAE troops from the Gulf Peninsula Shield force entered the kingdom at the request of the government last month, it was said that they were there to guard strategic buildings and infrastructure.

Reports from the city said that a young woman – beaten up last month by government supporters at Bahrain University – had died. A family member confirmed her death but the circumstances remained unclear. Arrests of lawyers and doctors working for the opposition continued.

Protesters, who were brutally removed from their peaceful anti-government site at Manama's Pearl roundabout last month, claim that there has since been a systematic campaign of repression by Sunni Bahraini security forces, backed by forces from Saudi Arabia and the United Arab Emirates.

Human Rights Watch says that four people have died in custody over the past month, out of 430 who were arrested. Opposition sources say that the true figure is 720 arrested with 210 missing.

Tensions were high after another day of mourning, for Karim Fakhrawi, a Shia businessman who died in police detention, allegedly after being tortured. The mourning also coincided with an important Shia festival, the commemoration of the death of Fatima al-Zahra, the daughter of the Prophet Muhammad. This is traditionally marked by three days of religious observance, including marches, which are now banned under Bahrain's month-old state of emergency.

Meanwhile, Mohammed al-Tajer, a lawyer who represented detainees held during the protests, was reportedly arrested along with a doctor accused of treating injured demonstrators. Doctors and medical facilities have been singled out in the repression, with the main hospital in Manama, Salimanya, under military occupation for the past month.

The government says that it is acting to maintain security after what it describes as an "attempted revolution" by mainly Shia protesters last month. It says hospitals were being used as organisation centres for the protests.

The government appears to be backing down from a plan to outlaw the leading opposition parties, Al Wefaq and Islamic Action, after protests from America and Britain. But a suppression of media reporting continues. Last week a correspondent from the Financial Times was denied entry at the airport. No reason was given.

Frank Gardner, the BBC's security correspondent, was detained at the airport for three hours before being allowed into the country. Other journalists reported increasing difficulties in obtaining visas.

Bell Pottinger, a British public relations company that advised the Bahraini crown prince, Salman bin Hamad al-Khalifa, and which was assisting with media visas, has had its government contracts suspended during the period of martial law.

Prince Salman is regarded as a moderate, but the failure of his offers of "dialogue" with the protesters has handed power to Sunni hardliners, led by the prime minister, Prince Khalifa, who has been in office since 1971.

The protests are seen as a threat to security across the whole Gulf region. There have been further protests in Iran in support of the mainly Shia Bahraini opposition, and Tehran recently warned Pakistan against sending any more "mercenaries" to join the crackdown.

Many Bahrain police officers are hired in Sunni countries such as Pakistan and Jordan.

• This article was amended on 18 April 2011. The original referred to Fatima al-Zahra as the wife of the Prophet Muhammad. This has been corrected.