By Jalil Hamid

KUALA LUMPUR, Sept 24 (Reuters) - An Islamic opposition leader has likened Malaysia to a police state and said a bloody riot this month was a symptom of outrage over eroding democratic rights.

On Sept. 8, police opened fire to disperse rioters at a rally demanding electoral reform in the northeastern state of Terengganu, wounding two members of the opposition Parti Islam se-Malaysia (PAS)

The rally, hosted by a coalition of five opposition political parties and 26 civil society groups, was the largest in a series of such events this year to demand free and fair elections.

"The tragedy has smeared Malaysia's democractic process," PAS President Hadi Awang told Reuters in an interview. "Malaysia is now lagging behind Indonesia, Thailand and the Philippines in terms of democracy and freedom."

"We can't hold rallies. The police use intimidation and threats against our supporters. The people are not free, as if we are still under the emergency rule," said Hadi, a burly and bearded Muslim cleric who studied at Egypt's Al-Azhar University.

"Even the Election Commission is taking sides. This will undermine efforts to create a clean and transparent democracy," said Hadi, a father of 14 from his two marriages.

MORE CLASHES FEARED

The 60-year-old said his party would not boycott the country's next general election, widely expected by early next year, but would continue to press for electoral reforms including tackling "phantom" voters.

The riot has raised fears of more clashes ahead of the polls as the opposition fights curbs on rallies. Malaysian law requires a police permit to hold an assembly of more three people.

Malaysia's opposition parties are split along racial lines, but are united in complaining the electoral system is rigged against them and struggle to get their message across to the voters.

PAS, a major opposition force in Malaysia's northeast until it fared miserably in the 2004 general election, wants to turn the multi-religious country into an Islamic state.

Prime Minister Abdullah Ahmad Badawi has called the riot a desperate attempt by the opposition to gain political mileage and discredit his 14-party ruling coalition.

During the riot, the national flag was burned, an act the mainstream media has seized on to accuse opposition members of being unpatriotic.

Hadi, whose party ruled Terengganu state between 1999 and 2004, said he was confident PAS would return to power there and retain the neighbouring Kelantan state in the next polls.

"The riot will lead to the people's uprising and anger. It will have a very positive impact on PAS in the coming polls due to growing voters' sympathy."

AlertNet news is provided by