Crowds of masked protesters hurled petrol bombs at Bahrain police who fired tear gas back yesterday, turning the streets into a conflict zone on the eve of a Formula One Grand Prix that demonstrators say glorifies a repressive government. Around 7,000 marchers held banners calling for democratic reforms as riot police beat up protesters.

Bahrain's government has spent £25m to host the global sporting event, hoping to demonstrate that normal life has returned to the Gulf island kingdom, after it cracked down harshly on Arab Spring demonstrations last year. But vivid televised images of smoke and rubble-filled streets threaten to embarrass Formula One and the global brands that lavish it with sponsorship.

Protesters were outraged at the death of one of their number, whose bullet-ridden body was found sprawled on a village rooftop early yesterday after clashes with police. Opposition activists said Salah Abbas Habib, 36, was one of a group of protesters beaten and shot at by police on Friday in the Shia village of Shakhura, around five miles west of the capital, Manama. The Bahraini Interior Ministry, however attempted to quell angry responses to the death by announcing an investigation and saying the case was "being treated as a homicide". Mr Habib's body was taken to hospital where security forces were said to be preventing his family from coming near it.

The majority Shia Muslim population are trying to break the near-monopoly of power held by the Sunni minority. At least 50 people have died in clashes with police since February 2011, in the longest-running street protests of the Arab Spring. The kingdom is run by the Sunni al-Khalifa dynasty, which owns the rights to the F1 race and has strong ties to the West.

Black smoke was seen rising from flaming tyre blockades in predominantly Shia villages yesterday as protesters continued to march against the regime. In the village of Diraz, in the north-west, thousands marched in reaction to the death of Mr Habib. Some of the angriest protests were in his home neighbourhood, nearby al-Bilad al-Quadeem.

Dozens of armoured vehicles were positioned along the highway to the race track outside Manama as part of a massive security operation to prevent unrest reaching the event. Labourers were seen pulling down posters depicting people killed during the uprising from the sides of the main highway to Manama, used by F1 teams and racing fans.

At the F1 track itself, armed guards provided round-the-clock security. Drivers remained oblivious to what was going outside. When asked by journalists what he made of reports of the death of a protester, Sebastian Vettel said: "It's the first time I've heard about it. I don't know what happened, so it's difficult to comment."

When the British F1 driver Lewis Hamilton was asked what message he had for fans in the Middle East, he ignored the protests, saying: "I'm very much appreciative of all the support that they give me and I hope that many of them come this weekend."

The Bahrain Centre for Human Rights yesterday reported serious injuries sustained by protesters during Friday and Saturday's skirmishes with police, including head injuries and broken limbs. They claim one protester, Mohammed Hassan, 26, was beaten and arrested on Friday night and has had no access to a lawyer. After being taken to Salmaniya hospital, he is understood to be in detention. Campaigners believe he was being targeted after appearing on the American TV news show Dan Rather Reports last month.

Dr Jasim Husain, a former MP for the leading opposition party Al Wefaq, who resigned in protest during last year's unrest, said the death of Mr Habib showed the "serious problems" with the security services, warning that his imminent funeral may spark more unrest. However, despite the government's violence towards protesters, he believes the race should go on. "Cancellation of the race would harden the position of extremists in the regime who could use that as an excuse for a further crackdown.