The funeral of an assassinated leftist politician drew hundreds of thousands of mourners chanting anti-government slogans to the Tunisian capital Friday — as well as gangs of armed youths who smashed cars and clashed with police just outside the cemetery.

Hours later, the prime minister insisted he'd try to form a new government despite his own party's opposition, threatening to resign if his proposal wasn't accepted.

The events added to the growing turmoil in Tunisia, where the transition from dictatorship to democracy has been shaken by religious divides, political wrangling and economic struggles. It's been a perilous stretch for a country many hoped would be a model for other post-revolutionary Arab states.

People from across the nation flowed into Tunis to lay to rest 48-year-old Chokri Belaid, a lawyer and top figure in the Popular Front alliance who was shot dead Wednesday. Thousands helped carry the coffin of the so-called "defender of the poor" from his parents' home to the Jellaz Cemetery a few kilometres away.

The funeral "was one of the most impressive in the history of Tunisia," historian Slahhedine Jourchi said, as demonstrators marched and chanted against the ruling Islamists. The turnout at the funeral was boosted due to a general strike called by Tunisia's most powerful labour union in honour of Belaid.

Hamma Hammami of the Tunisian Workers Party gave a eulogy as Belaid's friends and relatives wept.

"Sleep well Chokri. We will continue the fight," the leftist leader promised as the acrid smell of tear gas from the clashes near the cemetery invaded the air.

Technocratic government

Tunisians overthrew their long-ruling dictator Zine El Abidine Ben Ali in January 2011, kicking off the Arab Spring revolutions. In the two years since, a moderate Islamist party, Ennahda, won elections and has governed in a coalition with two secular parties.

But the ruling coalition's failure to stem the country's economic crisis and stop the often-violent rise of hardline Salafi Muslims have drawn fierce criticism, especially from staunch secularists such as Belaid. He had also accused Ennahda of backing some of the political violence through its own goon squads.

Belaid was shot dead while in his car outside his home by an unknown assailant. Hours after his killing Wednesday, Prime Minister Hamadi Jebali said he would form a new, technocratic government to guide the country to elections — but Ennahda, his own party, rejected that idea soon afterward.

A protester flees from tear gas fired by riot police during clashes near the cemetery where slain Tunisian opposition leader Chokri Belaid was buried Friday. (Louafi Larbi/Reuters)

Late Friday, Jebali renewed his proposal for a new government, which would be a key concession to the country's opposition. "I am convinced this is the best solution for the current situation in Tunisia," Jebali said, offering to resign if the elected assembly did not accept his new proposed cabinet.

Although Jebali said he was confident he could get Ennahda's support, his party's earlier rejection of the proposal exposed its own internal divisions between moderates and hardliners, and it remained unclear how the prime minister planned to pull enough support to his side.

"With his plan for a new government, Jebali has come out openly against the hardliners within his own party and limited his room for manoeuvr," said Riccardo Fabiani, an analyst with the Eurasia Group.

For many Tunisians, especially the youth, the political wrangling is especially frustrating because it distracts from the country's economic problems.

Protesters strike during funeral

The national average unemployment rate is 18 per cent, but for youth it is nearly twice that. And many fear that the ongoing political instability is fueling economic despair as well as crime, which is said to be on the rise since the fall of Ben Ali's police state.

As Belaid was being buried, the black smoke of burning cars mingled with clouds of white tear gas as masked and hooded youths brandishing machetes and clubs threw rocks at riot police nearby. Journalists reported being attacked for their cameras and mobile phones.

Many of Belaid's supporters, especially those on social media sites, speculated that the youths could have been thugs hired by Ennahda.

'We expect this phase of political uncertainty and instability to last for weeks.'—Riccardo Fabiani, analyst

But Ennahda has denied it ever backs violence, and since the revolution, young men have often taken advantage of political demonstrations to ransack shops and break into cars.

"These kids are uncontrollable and don't follow any political ideology," said Moncef Chebbi, 68, a retired computer programmer attending the funeral. He said they came from a nearby low-income neighbourhood. "This is very disappointing. It's a shame."

Khaled Tarrouch, the Interior Ministry spokesman, said 132 people were arrested and around a dozen cars set on fire. He said those arrested were being questioned to see if a particular person or group was behind the violence.

Leaders in the ruling coalition say they will meet over the next few days with representatives of all parties to forge compromises and start addressing Tunisia's pressing problems. But observers said it is unlikely things will calm down anytime soon.

"We expect this phase of political uncertainty and instability to last for weeks," Fabiani warned.