* March ended peacefully, police stayed away
* Government sees Formula 1 as raising country's profile
By Farishta Saeed
MANAMA, April 4 (Reuters) - Tens of thousands of mainly Shi'ite protesters marched for democratic reforms in Bahrain on Friday, two days before its annual Formula One motor race turns international attention toward the Sunni-led kingdom.
The protest, organised by al-Wefaq Islamic Society, the main opposition group, drew an estimated 20,0000 men and women who marched with national flags and posters in northwestern Bahrain demanding reforms and release of prisoners.
The tiny Gulf Arab monarchy, a U.S. ally, has suffered sporadic unrest since an uprising led by its Shi'ite Muslim majority in early 2011 demanding reforms and a bigger share of power in the minority-led government.
The turmoil forced the cancellation of that year's race, but the event went ahead despite continuing unrest in 2012 and 2013, with Germany's Sebastian Vettel winning both times. This year's race is due to take place on Sunday.
"The people demand democracy and reject tyranny," a poster read in Arabic and English. Police kept a distance from the march, which moved along 3.5 km (2 miles) on a highway west of the capital Manama and ended peacefully.
The Bahraini government sees the Formula One race as a major achievement for the country, raising its international profile, and attracting tourists and foreign investment.
On Thursday, anti-government demonstrators throwing petrol bombs clashed with police who fired tear gas and birdshot following a funeral procession in the Shi'ite Muslim village of al-Eker, south of Manama.
Many of Bahrain's Shi'ites dismiss the race as a distraction from the country's urgent political problems.
"This week, people from all around the world are in Bahrain to attend the F1. I want to know what are we, as Bahrainis, benefiting from it," said Mariam Jassim, a mother of three.
"What is more important for the government, the well-being of its people or to entertain foreigners?" she added.
School teacher Fadheel Mohammed agreed. "We want solutions to our problems. We want jobs, houses and better living conditions," he said. "It's not too much to ask of the government to treat us with dignity and pride."
Many Shi'ites complain of discrimination, especially in employment and housing, a charge the government denies.
However, in contrast to the Shi'ite-inhabited villages where the protests took place, there was little evidence of unrest in downtown Manama or around the F1 race at the Sakhir desert circuit, roughly 30 km (19 miles) southwest of Manama.
The opposition hopes to use the race, which is watched by millions around the world, to put the spotlight on its pro-democracy campaign. The government has portrayed the protesters as trying to undermine Bahrain's international image.
The Interior Ministry said it had beefed up security for the event. "The Ministry of Interior is sparing no effort to ensure the success of the 57-lap Grand Prix," state news agency BNA quoted the Southern Police Director-General Brigadier-General Sheikh Khalifa bin Ahmed al-Khalifa as saying.
The kingdom, home to the U.S. Fifth Fleet, quelled the uprising in 2011 with help from forces from its Sunni Gulf Arab allies Saudi Arabia and the United Arab Emirates.
But occasional protests, mainly in Shi'ite villages, have continued and police have increasingly come under attack from home-made bombs in recent months. One of three blasts last month killed three policemen, including one from the UAE.
Bahrain has accused Shi'ite power Iran across the Gulf of fomenting the unrest. Iran denies having links to Bahrain's opposition or any hand in the violence, but says it is supportive of Shi'ites there. (Reporting by Farishta Saeed; Editing by Sami Aboudi and Tom Heneghan)