Bahrain says it has identified suspects in police bomb attack

>

* Majority Shi'ites are demanding democratic change

DUBAI Oct 20 (Reuters) - Bahrain's interior minister said on Saturday that the country had identified several suspects in a bomb attack on Thursday that killed one policeman and injured another following clashes between protesters and the security services in the U.S. ally.

The tiny Gulf Arab kingdom has been convulsed by unrest since February last year after mass demonstrations led by majority Shi'ites demanding democratic change in the Sunni-led monarchy.

Thursday's explosion, which the government called a "terrorist attack" and which followed clashes in a village south of the capital, was the latest such bombing this year. Four policemen were injured in a similar incident in May.

"We have identified a number of suspects in the case," said Interior Minister Sheikh Rashid bin Abdullah Al Khalifa in a statement distributed by the government's Information Affairs Authority.

Bahraini authorities have accused Shi'ite power Iran, which once ruled the Gulf island, of instigating the protests, a charge Tehran has denied, and have promised a tough response to violent demonstrations after talks with the opposition stalled.

"We won't stop at just determining who committed the crime, but we will also determine who orchestrated the explosion and who trained the individuals in their bomb-making skills," Al Khalifa said.

Shi'ites complain of discrimination in the electoral system, jobs, housing and education and say they are mistreated by government departments, the police and the army. Government promises of action to address their concerns have come to nothing, they say.

Stocks Markets Bahrain