(Adds White House response; grand jury racial make up; police reports)
By Nick Carey and Edward McAllister
FERGUSON, Mo., Aug 22 (Reuters) - National Guard troops began leaving Ferguson, Missouri, on Friday in a sign authorities are increasingly confident they have quelled the worst of the violence that erupted after a white police officer fatally shot an unarmed black teenager.
Two straight nights of relative calm have created a sense of guarded optimism among some residents and officials that protests over the weekend will be more peaceful and largely devoid of the looting and violent clashes that drew national attention to the St. Louis suburb over the past two weeks.
Police made only isolated arrests Wednesday and Thursday nights. But some cautioned the calm may not hold: Weekend nights can often be more combustible, since more people tend to be on the streets, and funeral services are planned on Monday for 18-year-old Michael Brown.
"Monday night will be a critical night," said Bishop Edwin Bass, president of the St. Louis church Urban Initiatives of the Church of God In Christ. "The funeral could have a big impact on the mood of the community."
The White House said it was encouraged by the situation over the past few days, and that President Barack Obama is monitoring and getting regular briefings.
A local grand jury, made up of three blacks and nine whites, met this week to begin hearing evidence in the case, a process St. Louis County Prosecuting Attorney Bob McCulloch said could last into mid-October. Nine votes are needed for an indictment.
In addition to local activists and clergy, a contingent of U.S. civil rights workers and community activists from Georgia, Florida, Detroit and elsewhere have set up shop in Ferguson and say they plan to remain in town for an extended period.
The patchwork of groups, including the Dream Defenders and the National Lawyers Guild, are holding training and strategy sessions for local young people and others who want to continue to peacefully protest Brown's death. They are instructing teams of "legal observers" on how to document complaints of police harassment and abuse.
A flier one group has been handing out states, "Today It's Ferguson, Tomorrow It's You," and it pictures white police officers with dogs facing off against black youth with hands raised in the air.
The Dream Defenders, a civil rights group, is calling for a national walkout of college students on Monday.
At a makeshift memorial on the street where Brown was shot, dozens of supports gathered on Friday, including the teenager's father, Michael Brown Sr.
Wearing a blue T-shirt with a photo of his son and the words "I am legend, the world now knows my name," Brown took pictures of the memorial with his cell phone. He then stood for a while, looking stricken with grief, before returning to his car.
Later on Friday, the New Black Panther Party planned a protest march, while an area church said it would hold a "praise and worship" service.
LIFE ON HOLD
Missouri Governor Jay Nixon ordered the National Guard deployment to help quell the looting and vandalism that have accompanied the nightly protest rallies over Brown's death, but the troops have largely kept a low profile. Nixon on Thursday ordered their removal.
Protests since the Aug. 9 shooting of Brown cast the community of 21,000 people into the international spotlight as an emblem of often-troubled race relations in the United States.
Life for Ferguson residents largely has been put on hold, with streets closed off, some businesses shut and school canceled.
To help both students and their parents who need to go to work, local teachers have volunteered to tutor children. What started as two teachers and a dozen students on Monday at the library has expanded to 70 volunteers and more than 200 children by Friday, at both the library and the Ferguson Baptist Church.
"This has been a huge relief for the children, it gives them a break from all the protests," said Antona Smith, who is running the volunteer effort. Charities and individuals have donated water, juice, sandwiches, milk and hand wipes.
Teachers have also received crisis training from the district to spot signs of trauma when schools reopen on Monday, the same day as Brown's funeral.
Although Ferguson is predominantly African-American, its political leadership, police department and public school administration are dominated by whites. Civil rights activists say Brown's death was the culmination of years of police unfairly targeting blacks.
Brown's parents and supporters have been calling for the immediate arrest of Darren Wilson, 28, the police officer who shot their son. Wilson has been placed on paid leave and has gone into seclusion.
Brown's family and protesters are demanding that the probe be turned over to a special prosecutor, saying that McCulloch has a record of discriminatory handling of cases involving police accused of misconduct against blacks.
McCulloch, whose father was a police officer killed in the line of duty by a black man, has promised a fair and impartial investigation. (Reporting by Nick Carey and Edward McAllister; Additional reporting by Carey Gillam and Kevin Murphy; Writing by Mary Wisniewski; Editing by Eric Beech)