TRIPOLI The giant portraits of Muammar Gaddafi that festoon much of Tripoli are nowhere to be found in the Souq al-Juma neighborhood, where residents say the Libyan leader's opponents clash with security forces every night.
Gaddafi's officials insist there is no unrest inside the capital, which has remained firmly under his control despite a rebellion mainly in the east of the country.
But activists released a video on Monday showing hundreds of demonstrators attending a funeral for two slain protesters.
The video showed crowds chanting slogans including "Muammar is the enemy of God!"
Residents of the district, visited by a small group of foreign reporters including Reuters on Tuesday, confirmed that the protest had taken place and had been broken up by government forces opening fire.
They described several hours of unrest on Monday afternoon, and pointed to what they said were fresh bullet holes in walls and cars.
The incident appears to be the biggest confirmed demonstration inside Tripoli since Western forces began bombing the country in March, and backs activist accounts that anti-Gaddafi sentiment is growing in some parts of the capital.
Asked about the incident at a news conference on Tuesday, government spokesman Moussa Ibrahim said: "I have heard of the event. I did not have enough time to get information."
Gaddafi officials earlier denied that a large anti-government demonstration took place on Monday.
State television broadcasts daily rallies in support of Gaddafi and many people in Tripoli tell foreign journalists that they back the Libyan leader.
Large-scale demonstrations in Tripoli have not taken place since protests were crushed by the security forces in February.
Demonstrations in other parts of the country broadened into a rebellion which has stripped Gaddafi's government of control of most of the east and some parts of the west.
Gaddafi says his forces are fighting armed criminal gangs and al Qaeda militants. He has portrayed NATO air strikes as an act of colonial aggression. According to South African President Jacob Zuma, who visited on Monday, Gaddafi renewed a call for a ceasefire including an end to NATO bombing.
Residents who talked to foreign correspondents in the alleys of Souq al-Juma on Tuesday frequently alluded to their fear of the secret police. They spoke softly and glanced warily around alleyway corners to make sure no one was eavesdropping. Some wandered off when a vehicle drove by, only to return and continue talking when the coast was clear.
For security reasons, Reuters did not ask them to give their names.
"AFRAID TO GO OUTSIDE"
"The women, the girls are afraid to go outside," said one man in an alley near a mosque, who described himself as a former employee of an Italian firm. "At night, even if we go out for five minutes, people say: 'No, go back indoors.'"
According to his account of Monday's funeral, echoed in interviews with several other residents, security forces had appeared on the street and opened fire.
He said security forces often visit houses in the night to arrest men. "They have lists of names. Pictures."
Another man said: "The people here are very frightened from Gaddafi militia."
But several residents pointed out two bullet holes in the back of a red car and several bullet holes in the sides of buildings, which they said were a result of Monday's clash. One fresh bullet hole in a wall had been circled in chalk.
A taxi driver from the area said Souq al-Juma has long been a hotbed of anger toward Gaddafi's government. At night, youths daub anti-Gaddafi graffiti on the walls, which police quickly paint over, he said.
"Everyone in Souq al-Juma -- against Gaddafi," he said.
Inside an arcade of shops in the neighborhood, merchants said business had become slow because of the unrest.
SHOPKEEPERS SAY CLASHES HURT TRADE
"Every night there is --," said the owner of one dress shop, making a machinegun gesture with his hands and miming a burst of bullets. Asked who was responsible for the shooting, he said: "I don't know. I am sleeping."
At one gold shop, all the cases had been emptied of inventory. Asked why he had no goods, the shopkeeper smiled broadly and said: "War."
Western journalists are often greeted warily in parts of Tripoli that support Gaddafi, where aggressive anti-Western rhetoric is broadcast constantly on radio and television and plastered on placards on the walls.
But in Souq al-Juma, residents seemed happy to see foreign reporters. Told that the group of journalists included two Britons and an American, one shopkeeper smiled and began singing the praises of the Manchester United soccer team and the British pop singer Chris Rea.
Another, smiling warmly, said: "England, America, France, Italy. All good!"
(Editing by William Maclean and Maria Golovnina)