Opposition supporters take part in an anti-government rally in Yerevan.

Yerevan - Around 5 000 Armenians rallied against the government on Thursday, the latest in a series of opposition protests beginning to wring concessions from President Serzh Sarksyan.

Spurred in part by Arab uprisings in the Middle East and North Africa, the opposition in the ex-Soviet republic is trying to capitalise on popular anger over the state of the economy ahead of the next parliamentary election due in 2012.

The government is grappling with high inflation and rising poverty after a deep economic downturn in 2009, while Sarksyan's rule continues to be haunted by the deadly clashes that met his election in early 2008.

Thursday's rally marked the first time in three years that authorities had granted permission for protesters to gather on Yerevan's central Freedom Square, where the opposition rallied against Sarksyan's election in 2008 before violent clashes in which eight protesters and two police officers died.

It also followed an order from Sarksyan last week for investigators to intensify a probe into the violence, a key opposition demand alongside early elections. Dozens of activists jailed over the violence have since been released.

“If the door to dialogue is not yet open, it is half open,” opposition Armenian National Congress party leader and former Armenian president Levon Ter-Petrosyan told the rally.

Some analysts say an unofficial dialogue between Ter-Petrosyan and Sarksyan on reforms may already be under way.

The government's concessions suggest an effort “to finally move beyond the unresolved post-election crisis and to seek to overcome the burden of public mistrust”, said Richard Giragosian, director of the Regional Studies Centre in Yerevan.

But he cautioned that the country faced huge economic challenges despite a return to modest growth last year.

“Mounting disparities in wealth and income have exacerbated structural shortcomings in the Armenian economy, which pose much greater threats to the state itself,” he told Reuters, citing poor tax collection, entrenched corruption and budgetary pressure on social spending.

The landlocked country of 3.2 million people is a close ally of Russia, squeezed between Iran and Turkey.

Armenia's leaders say they want to build a European-style democracy and have won Western praise for allowing contested elections. But opponents say that in reality the country is run by a clique who refuse to give their rivals access to political power or economic influence. - Reuters