* Activists calling for new parliamentary elections
* Numbers at marches have fallen since Dec. 1 vote
* Election was boycotted by opposition after rules change (Adds Interior Ministry statement, context)
KUWAIT, Jan 22 (Reuters) - Kuwaiti police used smoke and stun grenades to scatter hundreds of protesters outside the capital on Tuesday after they gathered to demand the dissolution of parliament and fresh elections, witnesses said.
An initial demonstration, part of a series of marches against what activists regard as a rubber-stamp parliament, took place in the east of the oil-producing Gulf Arab state without intervention by police.
Security forces later broke up a group of protesters who tried to march towards a highway, witnesses said.
Kuwait has the most open political system in the Gulf Arab region and a parliament with legislative powers that can question government ministers over policy.
With its generous welfare state, Kuwait has managed to avoid the kind of mass unrest which toppled Arab leaders in 2011 but tensions have escalated in the long-running power struggle between the government and parliament.
The row between members of the elected National Assembly and the cabinet, appointed by a prime minister chosen by the emir, has held up reforms, stalled investment and prompted the dissolution of a series of assemblies.
Political parties are banned in Kuwait which the al-Sabah family has ruled for more than 250 years and where it retains the main levers of power. Top portfolios such as the interior, defence and foreign ministries are held by al-Sabah relatives.
Public gatherings of more than 20 people without a permit are banned and demonstrations outside pre-assigned areas are often forcibly routed by police citing security reasons.
The Interior Ministry said in a statement on Tuesday, criticising protesters for "spreading panic" in residential areas, that the demonstrators deliberately disrupted traffic and threw stones and fireworks at police, injuring one officer.
Protest marches have occurred more frequently in the U.S.-allied country since the ruling emir, Sheikh Sabah al-Ahmad al-Sabah, used emergency powers in October to change the electoral system. He said the amendments were aimed at fixing a flawed voting system and would ensure political stability.
Opposition politicians, including tribal figures and Islamists, say the new system was tailored to usher in a government-friendly parliament, and they boycotted elections on Dec. 1 in protest.
A peaceful demonstration on the eve of that vote, calling for a boycott, drew tens of thousands, in what organisers described as the largest march in the country's history. Since the election, the number of protesters taking part in marches organised through social media has dwindled. (Reporting by Mahmoud Harby; Writing by Sylvia Westall; Editing by Mark Heinrich)