Thousands of anti-government protesters camped overnight in a Manama square that has come to symbolise 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 the area surrounding Pearl roundabout, putting riot police to flight and confidently setting up camp for a protracted stay.
On orders from the crown prince, troops and armoured vehicles had withdrawn from the square, which they had taken over on Thursday after riot police staged a night-time attack on a sit-in by protesters, killing four people and wounding 231.
"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.
The crowds swelled into the thousands on Saturday, celebrating a triumph for the overwhelmingly Shi'ite 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, said an opposition source, who asked not to be named.
Ibrahim Mattar, a former parliamentarian from the Shi'ite 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, seen as a reformist, 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 Shi'ites 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."
Bahrain's 70 percent Shi'ite majority long has felt discriminated against in the Gulf Arab island that is also a close ally of Saudi Arabia and the United States, which bases its 5th Fleet in Bahrain.
"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.
Neighbouring Saudi Arabia, which fears unrest might spread to its Shi'ite minority, called on Bahrainis "to act with reason ... and accept the proposals of the government of Bahrain ... which is keen to protect stability and security", an official statement carried by Saudi state media said.
Shi'ites feel cut out of decision-making and complain of unfair treatment in access to state jobs and housing.
Protesters, however, have taken efforts to avoid actions that would give them a sectarian image, waving the national red-and-white Bahraini flag and chanting slogans such as: "There are no Sunnis or Shi'ites, just Bahraini unity."
There was growing speculation that Prime Minister Sheikh Khalifa bin Salman al-Khalifa will be replaced with the crown prince on an interim basis, the source added.
Observers in Bahrain say that the crown prince has emerged as the strong man who has pushed aside for now the hawks in the royal court and the prime minister.
They say that during the crisis there has been informal communication. "The crown prince called Sheikh Ali Salman last night," the source said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.