Thousands of anti-government protesters camped overnight in a Manama square that has come to symbolize their cause and waited for talks on Sunday between the opposition and the Gulf state's crown prince.
Bahrain's opposition is expected to put demands to Crown Prince Sheikh Salman bin Hamad al-Khalifa, who is leading a national dialogue after days of unrest that has left six dead.
On Saturday protesters swarmed back into Pearl square putting riot police to flight and confidently setting up camp for a protracted stay.
On orders from the crown prince, troops and armored vehicles had withdrawn from the square, which they had taken over on Thursday.
"All political parties in the country deserve a voice at the table," Crown Prince Salman told CNN of the dialogue, adding the king had appointed him to lead it and to build trust with all sides.
"I think there is a lot of anger, a lot of sadness, and on that note I would like to extend my condolences to all of the families who lost loved ones and all of those who have been injured. We are terribly sorry and this is a terrible tragedy for our nation," he said.
The crown prince said protesters would "absolutely" be allowed to stay
in the square.
But he also asked the "crowds to leave" to start a "new phase of national action that would bring together all parties."
The crowds in Pearl square swelled into the thousands on Saturday, celebrating a triumph for the overwhelmingly Shiite protesters who took to the streets on Monday, inspired by popular revolts that toppled leaders in Egypt and Tunisia.
In addition to withdrawal of security forces, the main opposition demands are the release of political prisoners, resignation of the government and talks on a new constitution, an opposition source, who asked not to be named, told Reuters.
Ibrahim Mattar, a former parliamentarian from the Shiite party Wefaq, had said earlier that a main demand of the opposition was that the government accept the idea of turning Bahrain into a constitutional monarchy.
The demands likely will be put on Sunday to Crown Prince Salman, the opposition source said. The government said dialogue had already begun.
"The two main players are Sheikh Ali Salman and Ibrahim Sharif," the source said. Sheikh Ali is the secretary general of Wefaq, whose members quit parliament over the crisis, while Sharif heads the secular Waad group that has not won seats in parliament.
On Saturday, the crown prince suggested the unrest was the result of a lack of action on demands by Shiites who make up the majority of the population of the small Gulf Arab kingdom. which is ruled by a Sunni Muslim family.
He told Al Arabiya television that there may be a feeling that some basic demands had not been met. "We want to correct this situation and prevent its repetition."
"There are clear messages from the Bahraini people... about the need for reforms," he said.
"The protesters in Pearl Roundabout represent a very significant proportion of our society and our political belief," the crown prince told CNN.
"But there are other forces at work here. This is not Egypt and this is not Tunisia. And what we don't want to do, like in Northern Ireland, is to descend into militia warfare or sectarianism," he said in the interview, aired late on Saturday.
Earlier, the opposition had rejected the prince's offer of dialogue, saying it would join talks only after troops withdrew and the cabinet quit.
The Islamic National Accord Association, which is boycotting parliament over the army's iron-fisted response to protests sweeping the country, said 95 people were wounded on Friday, of whom three were "clinically dead."
Bahrain's main labor union called an indefinite strike from Sunday to protest at police violence and demand the right to demonstrate peacefully.