Malaysia rejected Thursday comments by the United States backing the right to hold peaceful protests, after authorities used tear gas and water cannons on rare mass rallies here.

Prime Minister Abdullah Ahmad Badawi has also warned he could use a draconian internal security law against protesters, drawing criticism from human rights groups and opposition parties.

The government has been badly rattled by two mass demonstrations in the streets of the capital Kuala Lumpur this month, one calling for electoral reform and the other by ethnic Indians to highlight alleged discrimination.

The US State Department on Wednesday implicitly criticised the crackdown, which has included the arrest of hundreds of protesters, some of whom witnesses said were beaten by police armed with batons.

"We believe citizens of any country should be allowed to peacefully assemble and express their views," a US State Department official said when commenting on the Malaysian crackdown.

Cabinet minister Nazri Aziz defended the government's response to the rallies, which went ahead despite police bans.

"What is good for their country is not necessarily suitable for our country. We are a sovereign nation," said Nazri, the nation's de facto law minister.

One of the leaders of the anti-discrimination rally, V. Ganapathy Rao, was arrested Thursday just days after being set free on sedition charges, according to lawyers for Hindraf, the ethnic rights group which mounted the protest.

The lawyers said he was expected to be charged on Friday with new sedition charges, after a court ruled that separate charges against him and two other leaders over speeches made earlier this month were not properly documented.

The original charges, which carried a punishment of three years imprisonment, related to speeches earlier this month in which the activists criticised preferential treatment for Muslim Malays who dominate the population.