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* Prison release only one demand from Sunni protesters
* Nearly three weeks of demonstrations testing Maliki
* Syria unrest fanning worries over Iraq's sectarian mix (Adds byline, more details)
By Suadad al-Salhy
BAGHDAD, Jan 14 (Reuters) - Iraq's government has released more than 300 prisoners held under anti-terrorism laws as a goodwill gesture to try to appease Sunni Muslim demonstrators who are staging protests against Shi'ite Prime Minister Nuri al-Maliki.
Three weeks of demonstrations, mainly in Sunni-dominated Anbar province, have evolved into a tough challenge for the Shi'ite premier, increasing worries that Iraq could slide back into the sectarian confrontation of its recent past.
Officials said a ministerial committee had freed 335 detainees whose jail terms had ended or whose cases had been dismissed for lack of evidence. Sunni leaders say security forces use terrorism laws to unfairly target their sect.
Dozens of prisoners in yellow Iraqi correctional department uniforms waited surrounded by guards as women in traditional robes and old men tried to catch a glance of detainees to see whether relatives were among those released.
"In name of the Iraqi State, I apologise to those who were arrested and jailed and were later proven to be innocent," said Deputy Prime Minister Hussein al-Shahristani, a senior Iraqi Shi'ite figure heading the committee.
Detainee releases are just one demand from Sunni protesters. Many are also calling for Maliki to step down, an end to a campaign to track down former members of Saddam Hussein's outlawed Baath party, and for an amnesty law < ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
TAKE A LOOK - Iraq's political turmoil
Thousands of protesters are still camped out in Anbar, once the home of al-Qaeda's campaign against U.S. troops in Iraq, where they have blocked a main road to Jordan and Syria near the Sunni heartland city of Ramadi.
"This is not enough. We didn't ask for a gesture or a gift for the people. We want to give people their rights," said Jaber al-Jaberi, a lawmaker from the Sunni-backed Iraqiya block.
The turmoil erupted in late December after officials arrested members of a Sunni finance minister's security team on terrorism charges. Authorities denied that the case was political, but Sunni leaders rejected the arrests as part of a crackdown on their community.
A year after the last U.S. troops left Iraq, tension between Shi'ites and Sunnis is still raw. Thousands were killed in several years of sectarian violence that erupted shortly after the U.S.-led invasion of 2003 to oust Sunni strongman Saddam.
Many Iraqi Sunnis feel they have been sidelined by the country's Shi'ite majority leaders and the country's government, split among Shi'ite, Sunni and ethnic Kurds, is deadlocked over how to share power.
The protests are compounding worries about a sectarian confrontation igniting in Iraq which, along with the conflict in neighbouring Syria, would deepen a regional confrontation between Shi'ite Iran and Sunni Arab Gulf states.
More hardline Sunni leaders in Iraq view the war between mostly Sunni rebels in Syria and President Bashar al-Assad, an ally of Iran, as an opportunity to strengthen their own position should Assad fall and a Sunni government come to power. (Writing by Patrick Markey; Editing by Angus MacSwan)