By Anthony Boadle

HAVANA, May 9 (Reuters) - The dismissal of charges in the United States against a veteran anti-Castro militant and accused bomber prompted outrage and frustration on Wednesday in Cuba, where he is seen as public enemy No. 1.

A U.S. judge dismissed immigration fraud charges on Tuesday against Cuban exile Luis Posada Carriles, 79, a former CIA operative who is wanted in Cuba and Venezuela on charges of downing an airliner and other bomb attacks.

Cuba has portrayed the U.S. case, in which Posada Carriles was accused of entering the country illegally, as a smokescreen to protect him from facing justice for larger crimes.

He is considered a terrorist in Cuba and Venezuela, where he is accused of masterminding the 1976 bombing of a Cuban airliner that killed 73 people. Even Cubans who do not support their communist government were outraged that Posada Carriles walked free after the judge dismissed immigration charges.

"Even if this system changes, no one will accept Posada Carriles back (in Cuba). He is the public enemy No. 1," said Jorge, a drummer walking on Havana's Malecon seafront boulevard. "He should be shot," said the young man who declined to be identified by his full name.

Like no other opponent of their leader Fidel Castro, Posada Carriles embodies for Cubans decades-old hostilities between Cuba and right-wing exiles in Miami, who view him as a hero.

"He's a murderer. The withdrawal of charges makes me mad. No one has hated Cuba as much as he has," said Juliano Garcia, 82, a retired barber shopping for fruit and vegetables.

In a 1998 interview, Posada Carriles told the New York Times he plotted a wave of bomb blasts in Havana hotels that killed an Italian the year before. He later denied saying so.

The U.S. judge dismissed the immigration charges against Posada Carriles on the grounds that the U.S. government case was based on statements it got from him under false pretenses.

Posada Carriles still faces a U.S. deportation order issued last year for entering the country illegally, but the U.S. government has been unable to find a country to accept him aside from Venezuela and Cuba, where U.S. courts have found he may face risk of torture and execution. In the meantime, he is free in the United States.

A New Jersey grand jury has been impaneled to determine if there is enough evidence to charge him with terrorism in connection with the 1997 Havana blasts.

CUBA CALLS CASE 'FARCE'

Cuba and its ally Venezuela called the immigration case a "farce" and accused Washington of harboring a known terrorist who could reveal damaging secrets .

"The U.S. government fears that if he goes to prison he will tell all he knows and did when he worked for the CIA who trained him and taught him to kill and place bombs," Cuban Foreign Minister Felipe Perez Roque said in Caracas.

Roque, speaking at a news conference with Venezuelan Foreign Minister Nicolas Maduro, accused the United States of a "hypocritical double standard" in its war on terrorism.

Maduro said Venezuela will again request his extradition to stand trial on charges of masterminding the 1976 suitcase bombing of a Cuban airliner off Barbados that killed all 73 people aboard, including a Cuban fencing team.

Posada Carriles, a Cuban-born naturalized Venezuelan, escaped from a high security Venezuela prison in 1985. He was also jailed in 2000, then pardoned, in Panama.

Cubans are regularly reminded of the mid-air bombing by state media broadcasts of the crew's last words.

Odalis Perez, who was 10 when her father Capt. Wilfredo Perez died struggling to keep the plane in the air, recalls that moment as she opens her wallet to show a yellowing photo of the pilot.

"We are outraged that the U.S. government can allow Luis Posada Carriles to walk away scot-free," she said. "We demand justice. Either extradite him to Venezuela or try him in the United States."

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