Cuba's wide-scale crackdown on dissent that led to arrests at a funeral shows the Central American country isn't ready for credible political reform despite its ambition to embrace a market economy.

For more than two years Cuba has been sending signals it is reforming and restructuring and recently drew multibillion-dollar Brazilian investment in preparation for its entry into the marketplace.

The Cuban process bears uncanny resemblance to reforms initiated in China which opened up the economy but left the Communist Party in place, a decision now seen behind that country's hard-line stance on dissent and huge corruption scandals involving party officials with scant accountability.

Cuba, too, has loosened the Communist Party's grip in parts on the populace but makes notable exceptions on issues of fundamental freedoms of expression, association and free enterprise.

This became starkly apparent this week when Cuban security authorities rounded up prominent individuals who turned up at the funeral of political activist Oswaldo Paya, 60.

Paya died Sunday in a car crash his family and friends allege was a classic communist-style incident dressed up as an accident. Fellow activist Harold Cepero Escalante, 31, also died in the crash in eastern Granma province. The family says the car was probably forced off the road.

However, as hundreds of the popular activist's admirers and friends assembled at the San Salvador Catholic Church in Havana, security forces in civilian attire turned up too, but to round up some of the mourners.

Among those picked up was Guillermo Farinas, who staged hunger strikes earlier to draw attention to Cuba's political prisoners. In 2010 Farinas received the Sakharov Prize, the European Union's human rights award, which was earlier awarded to Paya in 2002.

The exact circumstances in which Paya and Cepero died may never be known, while evidence remains scarce but Paya's followers vowed to pursue his legacy of a stepped up campaign for civil rights in Cuba.

Paya's Varela project, begun in 1998, seeks grassroots support for restoration of rights through measures such as the holding of a referendum. Against heavy odds, more than 10,000 Cubans signed a petition for democratic rule more than 10 years ago.

Paya was branded in government statements and media as an agent of the United States seeking to undermine Cuba's revolution. However, opponents of the Cuban regime in the United States thought he was too soft.

At the funeral, Paya's daughter, Rosa Maria Paya, 23, contested the official account of her father's death and announced she was holding the government of President Raul Castro responsible for the "physical integrity of my two brothers, my mother and all my family."

"The repeated threats against the life of my father and our family and those who have accompanied us during all these years, know the truth in what I am saying," she said.

Authorities said Paya and Cepero died when their rented car went off the road and struck a tree.

A Spanish national who was driving the car, Angel Carromero Barrios, 27, was taken into custody for questioning after being released from a Havana hospital Monday. Carromero was named in news media reports as an activist with the youth wing of Spain's ruling Popular Party.

A Swedish man, Jens Aron Modig, 27, who was also in the car at the time of the crash, was treated at a hospital and released.

Rosa Maria Paya told Miami's El Nuevo Herald that passengers in the car told the family of a second vehicle that had tried to force the car off the road.

"We are going to shed light and seek justice for the violent death of my father and our young friend Harold," she said at the funeral service.

"We do not seek vengeance," she said. "We do not do it out of hatred because as my father said ... we do not have hatred in our hearts but we do have a thirst for the truth and a yearning for liberty."