* Fear over repeat of Syria and Egypt curtail protests
* Aid helps win Jordan's conservative establishment reprieve
* Street anger could erupt again with new IMF austerity plan
By Suleiman Al-Khalidi
AMMAN, Jan 24 (Reuters) - The shouts of street traders drown out the timid chants of the handful of activists outside the mosque in the heart of Amman where hundreds of people used to protest against Jordan's King Abdullah.
Police and plain clothes intelligence agents stand by, unarmed and relaxed. Nowadays even such small protests are rare at the Husseini mosque, once a weekly flashpoint of demonstrations inspired by revolts across the Arab world.
A growing sense that regional upheaval has brought more pain than progress has combined with international aid, some political reform, state control and co-opting of opponents to sap opposition to the pro-Western monarch's 15-year-old rule.
Protests in the kingdom, where a Hashemite monarchy styles itself as a unifying force for a diverse population, have involved Islamists among Jordanians of Palestinian origin and "Herak" activists from tribes that traditionally back the king.
But they have not taken off like those which overthrew Egypt's Hosni Mubarak or shook President Bashar al-Assad's grip over neighbouring Syria. Almost a million Syrian refugees have crossed into Jordan in nearly three years of civil war.
"Syria and Egypt and the whole question of what is happening in Arab Spring countries has thrown the Herak activists off balance," said Moeen al-Harasis, a leading Herak figure who has spent around four months in jail on and off over the past two years after calling for the overthrow of the monarchy.
He is now standing trial in a military court, one of 40 Herak activists facing charges of undermining the state that carry a maximum penalty of 15 years hard labour.
None are in detention and none have yet been sentenced, an example of how Jordan sends the message that persistent dissent will not be tolerated while avoiding the kind of crackdown which helped turn Syria's protests into an armed insurgency.
"The king's position has been secured by the deftness with which his security forces have contained Herak, and divided or isolated its different wings," said Tariq Tell, a Jordanian scholar and activist.
The king, born of a British mother and educated in Britain and the United States, has also benefited from a Western and Gulf commitment to shoring up a country whose role as a haven for successive flows of refugees underpins regional stability.
Billions of extra aid dollars mitigating the impact of the Syrian refugee flood in a resource-poor country of just 7 million people also help to undermine Abdullah's critics beyond and within the tribal political and military establishment.
Palestinians from the West Bank and further afield dominate private enterprise in Jordan and acquiesce politically in a system in which tribes from the East Bank of the river Jordan get state patronage in return for backing the king.
The Herak tribal activists, led by a mix of disgruntled army officers and civilian officials, oppose IMF-backed austerity measures and fear the king might enact market-oriented reforms at their expense.
Their fiercest protests occurred in provincial towns after steep increases in fuel costs in November 2011, echoing past civil unrest triggered by price rises for bread or fuel.
Hundreds were arrested after demonstrations in which banks and state property were torched, but most were quickly released, after reforms legalised peaceful demonstrations without prior security approval.
"The king saw the Arab Spring knocking and said, 'You don't deny it, you deal with it, to create positive change rather than fight it off'," a senior palace official said on condition of anonymity because he was not authorised to speak to media.
In contrast to Herak, Islamist activists have strong roots among Jordanians of Palestinian origin in the big cities and have demanded fairer representation for urban communities - a platform which challenges the political prominence and financial subsidies enjoyed by the country's tribal power base.
Security forces distributed soft drinks and water at some early protests and the 51-year-old monarch created funds for the poor, reversed subsidy cuts and raised salaries to assuage anger over costs of living.
The parents of his wife, Rania, are of Palestinian origin and her background and high profile local and international role has drawn criticism from conservative tribal elements.
But authorities won over some Herak leaders with jobs and perks and avoided a showdown with the Islamists, partly thanks to the toppling of their ideological allies in Egypt, the Muslim Brotherhood, which reversed their growing assertiveness.
STABILITY OR CHAOS
The deputy head of the Jordanian branch of the Muslim Brotherhood, the country's largest opposition group, acknowledged that the crackdown on Egypt's Islamists and Syria's devastating civil war were both significant setbacks.
"The rivers of blood in Syria and the Egyptian model - also what is happening now in Iraq - created a feeling that was exploited by the regime to lower people's ambitions of reform," said Zaki Bani Rusheid. "People were given a choice between the present reality of stability or chaos and destruction."
Faced with those limited options, most ordinary Jordanians have decided to settle for stability.
"Jordanians see what's happening in Syria, Egypt, and Iraq and say: 'Yes we are under pressure but surely we are better than the others'," said Abdul Hadi al-Majali, a prominent Jordanian politician.
"There is security and that is a very important factor."
The king has taken the edge off the protests with constitutional changes to expand the role of parliament in appointing prime ministers. He says his aim is a British-style constitutional monarchy but has held back from major reform that might antagonise an entrenched tribal establishment.
Prime Minister Abdullah Ensour's government has tapped into a $5 billion Gulf fund and resumed borrowing from international financial markets with U.S. loan guarantees - a far cry from the dire financial straits that pushed Jordan to the brink of economic collapse at the end of 2012.
PRESSURE EASES, BUT PAIN AHEAD
Along with the challenges, the refugee influx has brought economic benefits, economists and politicians say.
In the northern border areas, Syrian refugees who fled violence just a few kilometres away are bringing much needed skills and rejuvenating once depressed nomadic border towns whose residents relied on state employment.
Wealthier entrepreneurs have relocated businesses, filling up once idle space in the country's industrial parks while Jordan's employers have tapped a pool of cheap skilled labour, fuelling growth.
On the political front, Western backers have eased pressure on Jordan for reform. "The king is not feeling the domestic pressures and has convinced the international community he is doing the necessary reforms," said one senior Western diplomat.
Opposition sources cite the arrests for public criticism of the monarch among signs of renewed intrusiveness by the intelligence apparatus that was reined in under the pressure of protests and the monarch's efforts to curtail its powers.
Many politicians and independent observers say planned IMF austerity measures will inflict economic pain on many poor Jordanians, raising the risks of more protests and instability.
Further IMF targeted electricity hikes are due this year to reduce billions of dollars of debts by state-owned companies that have resorted to importing expensive fuel oil to generate power after the rupture of cheap Egyptian gas supplies. Bread and water subsidies are also being cut.
The kingdom has survived economic and political crises before, buoyed by foreign support and a sense the monarchy has brought some unity to a divided country surrounded by turbulence.
"Jordan will continue to feel that it has successfully ridden the wave of Arab transitions without seriously addressing some of the key economic and political challenges facing the country," said Marwan Muasher, a former minister who now works at the Carnegie Endowment for International Peace.
"And it will probably get away with it, at least for now." (Editing by Dominic Evans and Philippa Fletcher)