ON JUNE 1st, two-and-a-half months after a fierce crackdown on Bahrain's mainly Shia protesters, the ruling al-Khalifa family, which is Sunni, officially lifted a state of emergency that had been imposed with vigorous military support from Saudi Arabia and the United Arab Emirates. Tanks which had been manning city-centre junctions chugged back to bases farther out, hoping to give foreigners and locals alike a sense that normality had returned. The body that governs Formula 1 motor-racing is to decide whether to hold a race in Bahrain later this year: it had been postponed because of the unrest. If the green light is given, the authorities will hail the decision as a sign of international recognition that all is again well.

But it is not. In the Shia villages of the island's north-west, it felt much the same, as troops shot at a few token demonstrators. While Shia villagers cower, an air of Sunni triumphalism reigns over the island. A minority of some 40%, Bahraini Sunnis wave the flags of friendly Gulf states alongside their own. Teachers arrange “thank you, Saudi” days in schools. The Bahraini king's men have razed dozens of Shia shrines and put up billboards on main roads near Sunni-populated suburbs, depicting nooses dangled over the heads of Shia leaders. Hundreds of public-sector Shias have been suspended, to the delight of Sunni immigrants from such places as Pakistan and Bangladesh seeking promotion.

The Labour Market Regulatory Authority has purged the private sector of Shias suspected of sympathy with the protesters. Bank managers have been asked for employees' attendance records and told to sack Shias who were absent during protests in February and March. Parliament has been stripped of many of its Shia representatives. Sunni MPs have voted to accept the resignation of the Shia group, Wefaq, which was the largest in parliament.

Sunni town councils have voted to exclude representatives of the Shia opposition. “Throw out the traitors,” says Abdel Nasser al-Mahmid, who heads Muharraq council, a Sunni stronghold in north-eastern Bahrain. Though mild-mannered, he is a Salafist, adhering to a fiercely puritanical version of Sunni Islam that harks back more than a millennium to the days of the Prophet Muhammad.

The crackdown has restored a façade of calm. Shia protesters and the few Sunnis who campaigned at their side are lying low, hoping the terror may pass them by. Demonstrators have removed celebratory photographs of Pearl Roundabout, the geographical hub of the protests, from their Facebook pages. Those still with jobs pin badges saying “al-Khalifa—Glory of the Nation” to their lapels. After weeks of self-imposed curfew, traffic jams outside the big shopping malls have been building up again; Asian girls in hot-pants are again queuing to enter hotel clubs. In a speech on May 31st, the 61-year-old king, Hamad bin Isa al-Khalifa, said he wanted to engage in a national dialogue. The lifting of martial rule would, he hoped, be a sign that peace and normality would prevail.

But reconciliation between the two main Muslim sects is still a distant prospect. Troops from elsewhere in the Gulf, mainly Saudi Arabia, will remain, along with military courts dispensing summary justice; hundreds of protesters have been sent to jail and around 90 have been killed or have disappeared; torture is rife. The Saudis apparently insist that Prince Khalifa bin Salman al-Khalifa, the king's 75-year-old uncle, who has been prime minister for 40 years, must stay in his post. The Saudis have urged the king not to use the safety valve, as his Jordanian counterpart has done, of dismissing the government. “It's a Saudi red line that the prime minister must not cross,” says a prince.

In 2001 Shias and Sunnis together voted overwhelmingly to give Hamad, previously styled as a mere emir, the title of king in exchange for an elected parliament. But parliament's powers have since been slowly whittled away. Once relatively free of sectarian animosity, Bahrain has allowed the fiercely anti-Shia feeling expressed in Saudi ruling circles to cross the causeway that connects it with its much bigger neighbour. “Staff [from different sects] who used to spend the evenings together laughing no longer talk to each other,” says a banker.

Built in the 1980s as a model of cross-sectarian integration, the dormitory suburb of Hamad Town, 18km (11 miles) south-west of Manama, the capital, now seethes with tension. Hitherto famed for its high rate of marriage between Sunnis and Shias, sectarian quarrels have repeatedly erupted in girls' schools. Local Sunni and Shia politicians campaign for the boycott of each other's businesses. A new Sunni group, the National Unity Gathering, has helped open a market intended to bolster Sunni merchants. “Especially in times of crisis, we have to break the near-monopoly of the Shia opposition on the food supply,” says its leader, Abdel Latif Mahmoud. “Sunnis are waging a war on the Shias,” bemoans a prominent Shia publisher who, before the crackdown, was often in friendly touch with the crown prince, Salman bin Hamad al-Khalifa, a relative moderniser whom Western diplomats hoped would displace his great-uncle as prime minister.

Indeed, reformers reckon that the 41-year-old crown prince has become isolated within the royal family. Precisely because he is strongly favoured by Western governments urging the ruling elite to accommodate the Shia majority, he is regarded with suspicion by the increasingly dominant Sunni chauvinists. And he is less keen to echo official assertions that the turbulence is all due to Iranian plots.

Amid such sharpening polarisation, accusations that Iran is encouraging its fellow Shias in Bahrain to rise up as a fifth column risk self-fulfilment. Forced out of public life, Shias are turning their backs on the regime. Doctors treat the injured in hiding to spare them arrest in public hospitals. Just as Sunni Bahrainis look to help from their Gulf neighbours, so younger Shias increasingly listen to Lebanese, Iraqi and Iranian television channels beamed by their co-religionists. “We do not say fight back, but I can't say to a man whose woman is being beaten ‘do not defend yourself',” says Ali Salman, an Iranian-trained cleric who heads Wefaq. Thanks to a surge in the monarchy's naturalisation of Sunni immigrants, the Shia majority has slipped from around 70% a generation ago to barely 60%. Shias fear they may dip to a minority.

Despite the lifting of the emergency, the spectre of sectarian bloodletting in the manner of Lebanon and Iraq still frightens many people. Some Westerners are packing their bags. Banking, which once accounted for over a quarter of Bahrain's wealth, is searching for safer climes. Several foreign banks have drastically reduced their staffs. Even members of the ruling family are said to have sent wads of cash abroad. By using ruthless methods in the hope of preserving their power, the al-Khalifas may in the long run be storing up even more trouble and resentment for a shaky future.