UPDATE 1-Bahrain delays verdict in protest leaders' retrial
* Verdict delayed until Sept. 4 as street protests simmer
* U.S. wants detainees freed to stabilise ally against Iran
* King says Bahrain has survived a year of "foreign plots"
DUBAI, Aug 14 (Reuters) - Bahrain on Tuesday delayed until Sept. 4 a ruling in the retrial of 20 men convicted of leading an uprising, lawyers said, a case under scrutiny from U.S. officials keen for a release of prisoners to help restore calm in a regional ally against Iran.
Bahrain, where the U.S. Fifth Fleet is based, has been in turmoil since a protest movement dominated by majority Shi'ite Muslims erupted in February 2011 as part of the wave of popular revolts against repressive dynasties across the Arab world.
The 20 men - including seven being tried in absentia - are believed to be among hundreds who an international rights commission assessed in November had been tortured during a period of martial law imposed to help quell the uprising.
Bahrain's Sunni Muslim ruling family has faced calls from the United States for the release of all those jailed over their political views to defuse destabilising protests and foster reconciliation and democratic reforms, although Washington has avoided prodding Manama publicly over the protest leaders' case.
"The verdict was delayed to Sept. 4," said Mohammed Al-Jishi, a lawyer for some of the 13 men present in court for an expected reading of verdicts. The ruling kept the men in jail despite calls by protesters and rights groups for their release.
The presiding judge gave no reason for the postponement.
"It looks like the regime can't bring itself to take the hard decisions when it comes to reform and reconciliation," said Brian Dooley, director of the Human Rights Defenders Program at U.S.-based group Human Rights First.
The hearing was attended by a number of foreign diplomats, underlining how the outcome is expected to have a weighty impact on the evolution of the crisis in the Gulf Arab island state.
During the session, angry defendants chanted: "We sacrifice our soul and blood for you, Bahrain". Lawyers said the judge appeared angered by chanting inside the courtroom.
Analysts say the government - long dominated by the Sunni Al Khalifa family - is in a quandary over the case. The men have become popular heroes whose release they fear could reinvigorate the protest movement and demands for reform, centering on a parliament with full powers to legislate and form governments.
KING SAYS REFORMS ON COURSE
In a speech on Tuesday marking the final days of the annual Muslim fasting month of Ramadan, King Hamad bin Isa Al Khalifa said that Bahrain had survived a period of "foreign plots" and was pushing ahead with reforms.
It was not known who he was referring to. Bahrain has accused Shi'ite power Iran of inciting the protests and six men were convicted in May of plotting with Iran to stage attacks. Iran and Bahraini protesters have denied having links.
"During this year we lived arduous circumstances because of those hostile ambitions and foreign plots which never stopped, but we all stood together in the face of those who provoke strife," the king said, according to the state news agency BNA.
"But we are not ignorant of internal problems, which we are sparing no effort to solve... Bahrain has become a country of law, constitution, institutions, separation of powers, democracy and human rights."
The government has initiated some contacts with opposition parties on reforms but no formal public dialogue has transpired.
A spokesman for Wefaq, the leading opposition party, said the king's speech and delay in the verdict showed the government felt it was under little real pressure from Washington.
Bahrain is caught up in regional rivalry between Iran and Saudi Arabia. The presence of U.S. warships helps ensure a free flow of oil exports out of the Gulf, while Tehran has threatened a blockade if its stand-off with Western powers over its disputed nuclear programme deteriorates into confrontation.
"Wasting time makes the exit from this conflict much complicated," said Matar Matar, a former Wefaq parliamentarian.
A military court sentenced the 20 uprising leaders last year to terms of up to life in prison. The main charges were "forming a terrorist group with intent to overthrow the system of government" as well as collaboration with a foreign state, a reference to Iran. The defendants denied the charges.
A military appeals court upheld the sentences in September, but a civilian court ordered a retrial in April.
Eight of the 20 men received life sentences, including rights activist Abdulhadi al-Khawaja and opposition leaders Hassan Mushaimaa and Abdulwahhab Hussein, who had called for turning the Gulf Arab monarchy into a republic.
Sunni opposition leader Ibrahim Sharif was sentenced to five years. Those tried in absentia include blogger Ali Abdulemam, who was given a 15-year sentence and is in hiding.
London-based Amnesty International said last week it hoped all Bahraini detainees would be released in Tuesday's session, saying they were "prisoners of conscience".
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