MALMO, Sweden (Reuters) - Swedish host city Malmo geared up for the Eurovision grand final on Saturday as excitement mingled with the tension of heightened security threats and political protests over Israel's participation.

The 68th version of the song contest, which is always billed as non-political, is taking place against the backdrop of the devastating Israeli military campaign in Gaza, triggered by Hamas' deadly Oct. 7 attack on Israel.

A festival of tongue-in-cheek kitsch and ephemeral tunes, the contest has been thrust into the arena of political conflict with protesters, online and on the streets of Malmo, calling for Israel to be excluded from the competition.

Bookmakers have Croatia's Baby Lasagna, real name Marko Purisic, 28, with "Rim Tim Tagi Dim", a song about a young man who leaves home aspiring to become a "city boy" with better opportunities, as front-runner to win the contest.

Israeli solo artist Eden Golan, 20, and her song "Hurricane" also qualified for Saturday's final with betting odds on Friday showing her emerge as one of the leading contenders to win.

The list of favourites also includes Swiss rapper and singer Nemo, 24, performing "The Code", a drum-and-bass, opera, rap and rock tune, about Nemo's journey of self-discovery as a non-binary person.

Other nations high on betting list include France, the Netherlands, Italy, Ukraine and Ireland, while streaming data from Spotify has also suggested a chance for host nation Sweden.

The world's biggest live music event, the Eurovision Song Contest is estimated to have drawn around 100,000 visitors to Malmo, Sweden's third-biggest city, while many millions more in Europe and further afield tune in for the broadcast.

Eurovision organisers resisted calls to exclude Israel over its military campaign in Gaza, arguing the competition is non-political, though they did demand that Israel tweak the lyrics of its entry, originally titled "October Rain", to remove what they said were references to the Oct. 7 attack.

The lyrics were altered, allowing Israel to take part, and Golan characterises her song as a strong power ballad that describes a person going through a storm of emotions.

Some booing was heard from the crowd before, during and after Golan's performance in the semi-finals on Thursday, but also applause and Israeli flags waving, according to a Reuters journalist in the auditorium.

In central Malmo, more than 10,000 pro-Palestinian campaigners, including climate activist Greta Thunberg, staged a non-violent protest in the hours ahead of the semi-final, waiving Palestinian flags and shouting "boycott Israel".

A smaller group of pro-Israeli supporters, including members of Malmo's Jewish community, also staged a peaceful demonstration in the city, defending Golan and her right to take part in the contest.

More demonstrations are planned for Saturday and again expected to draw thousands of protesters. There will also be an alternative music festival in the city that has billed itself as the "genocide-free song contest".

Protesters have complained of double standards as Russia was banned from Eurovision in 2022 by European Broadcasting Union (EBU) after several broadcasters called for the country to be expelled following its invasion of Ukraine.

The 26 contestants in Saturday's grand final include 10 from each of the two semi-finals of the past week, as well as the "big five" countries - Britain, France, Germany, Italy and Spain - and host country Sweden.

"Of course people want to express their own opinions and stuff like that. But for us, you know, it's just a dream and an honour to be a part of Eurovision," Marcus Gunnarsen, of duo Marcus & Martinus that is representing Sweden, told Reuters.

"So we haven't focused too much on that and just know that Eurovision is about, you know, uniting people and having a party and having a good time together."

Swedish group ABBA won Eurovision 50 years ago this year.

(Reporting by Jacob Gronholt-Pedersen, Tom Little and Ilze Filks in Malmo, Louise Rasmussen in Copenhagen, Terje Solsvik in Oslo and Johan Ahlander in Gothenburg; Writing by Niklas Pollard; Editing by Nick Macfie)

By Jacob Gronholt-Pedersen