* Man dies after being hit by rubber bullet
* Eight people injured, one critical
* Protesters demand better wages, jobs, end to corruption
(Updates with death, Muscat protest)
By Saleh al-Shaibany
MUSCAT, April 1(Reuters) - Hundreds of Omani protesters seeking jobs and better wages clashed with security forces in the industrial town of Sohar on Friday and a man died after being hit by a rubber bullet, a government source said.
Protesters threw rocks and the troops fired in the air to disperse them.
The confrontation, which witnesses said police brought to a halt with water cannon, took place three days after a crackdown against protesters to try to clear a Sohar roundabout where about 100 people had been camping out for weeks.
A 25-year-old man injured in Friday's clash later died in hospital, a government source said. the father of the man, identified as Khalifa Salim al-Alawi, confirmed the death, saying he was hit in the head.
He said his son's body would remain in the morgue until the government investigated the incident.
Activists told Reuters security forces used teargas and beat some protesters with batons. Eight people were taken to hospital with injuries and one was in critical condition.
In the capital Muscat, about 150 people gathered outside the Shura Council, the elected chamber of parliament, late on Friday but there was no visible security presence, a Reuters witness said.
Organisers said they were waiting for more protesters to arrive from Sohar and planned to march on government offices on Saturday.
Protests against autocratic rulers sweeping the region have not spared conservative and usually tranquil Oman, at the southeastern end of the Arabian Peninsula. The ruling dynasty has long been backed by Washington and also has ties to Iran, a U.S. rival for influence in the region.
The Gulf Cooperation Council has tried to help Oman and Bahrain, where protesters have been demanding political reforms, by pledging $20 billion in aid for socio-economic and infrastructure development.
Sultan Qaboos bin Said offered a pay rise to try to coax Omanis off the streets but protesters and workers have continued to hold sit-ins, including at two oil refineries two weeks ago.
Omani protests have centred on demands for better wages, jobs and an end to corruption. Many have also demanded that the government be held accountable for the detention of hundreds of protesters in Sohar.
Oman's public prosecutor said last week several "saboteurs" were arrested in Sohar
Sultan Qaboos, in power for 40 years, vowed in March to cede some legislative powers to the partially elected Oman Council, an advisory body. At present, only the sultan and his cabinet can legislate and a transfer of powers has yet to be announced.
One witness told Reuters military personnel fired in the air on Friday only when they failed to disperse the crowd peacefully after demonstrators left weekly prayers and gathered at the roundabout which had been cleared by the army on Tuesday.
"It was all going peacefully with the military keeping a close eye," one witness told Reuters. "But a section of the protesters started to throw stones and other objects at the army. Then they responded by firing in the air. Many ran away but a small crowd remained and continued to protest."
Activists from Sohar told Reuters security forces had harassed protesters from the very beginning of the sit-in and they began throwing rocks when they heard live gunfire.
Some of the Friday protesters at the roundabout had set up road blocks and were charging drivers tolls, witnesses said, saying they were jobless and needed the money. (Writing by Erika Solomon and Amran Abocar; Editing by Nick Macfie)