Saudi should free woman driver-rights group

* Police arrest Saudi woman driver in east of kingdom

* Woman driver posted Youtube video of her driving

* Video has attracted more than 500,000 views

JEDDAH, May 24 (Reuters) - Saudi Arabia should free a female activist arrested after driving a car in defiance of a ban on women motorists and posting video of it on Youtube to encourage others, a U.S-based rights group and activists said.

Police arrested Manal Alsharif at her home on Sunday and detained her in Dammam prison, facing charges of “besmirching the kingdom’s reputation abroad and stirring up public opinion,” Human Rights Watch (HRW) said in a report late on Monday.

The conservative Islamic state has no written ban on women driving, but Saudi law requires citizens to use a locally issued licence while in the country. Such licences are not issued to women, making it effectively illegal for them to drive.

Alsharif learned to drive in the United States. The video of her driving her car around Khobar in the oil producing Eastern Province attracted more than 500,000 views in three days. “Arresting a woman who drove her family around in a car and then showed it online opens Saudi Arabia to condemnation and, in fact, to mockery, around the world,” said Christoph Wilcke, senior Middle East researcher at HRW.

“The longer she stays in prison, the more the kingdom will have to answer for,” he said.

Over 550 Saudi citizens urged Alsharif’s release, according to a petition directed to King Abdullah and posted on Facebook.

“We call upon you, Custodian of the two holy mosques, to release the citizen Manal Alsharif and relieve her of the unjust actions towards her,” the petition says.

“We also believe that now is the time to resolve the issue of female driving clearly ... We need a clear law to determine if it is banned or allowed.”

Saudi Arabia is an absolute monarchy that does not tolerate any form of dissent and applies an austere version of Sunni Islam in which religious police patrol the streets to ensure public segregation between men and women.

Besides being banned from driving, women must have written approval from a designated male guardian -- a father, husband, brother or son -- to work, or travel abroad and even undergo certain forms of surgery.

The campaign Alsharif launched is aimed at teaching women to drive and encouraging them to start driving from June 17, using foreign-issued licences.

Reporting by Asma Alsharif; Editing by Jason Benham and Ralph Boulton