|With its own restive Shia population, Saudi Arabia is also watching developments in Bahrain closely [GALLO/GETTY]
Hillary Clinton, the US Secretary of State, has expressed "deep concerns" about the deadly attack on hundreds of sleeping anti-government protestors carried out by Bahrain's security forces at a central square in the capital, Manama, earlier this week.
The incident, in which at least five civilians were killed and many more seriously injured, was certain to sharply raise longstanding political tensions in the tiny, strategically located Gulf kingdom, which is home to the US Navy's Fifth Fleet and adjoins oil colossus, Saudi Arabia.
Analysts said the attack was likely to escalate the demands of the opposition – a coalition of liberal Sunnis and leaders of the majority Shia population – for a major overhaul of the monarchy headed by King Hamad bin Isa al- Khalifa.
"If you'd ask me Monday, I would have said the opposition would have been happy with the resignation of the prime minister or some constitutional or political reforms and accepted as a sign of seriousness by the royal family," said Toby Jones, a Gulf expert at Rutgers University.
"But instead they were met with violence, and I'm not sure those steps will be enough now," he added.
Increased polarisation and the risk of further violence in Bahrain comes at a particularly bad time for Washington, which is struggling to cope with the unprecedented turmoil in North Africa and the Middle East that has already resulted in the ouster of two long-time autocratic US allies – in Tunisian President Zine el-Abidine Ben Ali and Egyptian President Hosni Mubarak – in just the past month.
The popular unrest set off by Tunisia's so-called Jasmine Revolution has spread across the region - from Algeria to Iran - with major clashes between security forces and anti-government demonstrators reported Thursday in Libya and Yemen, another key ally which has received tens of millions of dollars in US military and security assistance intended to defeat al-Qaeda in the Arabian Peninsula (AQAP).
The region's unrest has posed a very difficult challenge to Obama who, according to the New York Times newspaper, ordered his advisers last August to produce a secret report on the prospects for popular revolt against autocratic governments throughout the Middle East, including Bahrain, Yemen, and other key countries, and how to encourage those regimes to implement reforms in time to avoid any explosions.
The report, according to the Times, was intended to grapple with the key question of how to balance US strategic interests in the region against demands by opposition forces for power-sharing and democratisation.
In Bahrain's case, those demands have been of long standing.
While generally more liberal and tolerant than its Gulf Arab neighbours, and boasting an elected parliament (albeit with quite limited powers), the country remains under the control of the Khalifa royal family that, in its nearly 300-year reign, has consistently marginalised and discriminated against its Shia population.
Shias make up some 70 per cent of Bahrain's roughly 540,000 citizens. More than 600,000 non-nationals also live on the island, which is connected by a causeway to Saudi Arabia.
Tensions began rising in August, two months before parliamentary elections, when the government began arresting scores of mainly Shia activists. The indictments in September of 23 prominent Shia politicians and clerics on charges of destabilising the country through violence and sabotage further inflamed the situation.
After the election, Clinton visited Bahrain, praising it as a "model" for the region. "I see the glass as half full," she said when asked about the arrests and reports of torture. "I think the changes that are happening in Bahrain are much greater than what I see in many other countries in the region and beyond."
As the popular turmoil swept through the region earlier this month, the political temperature in Bahrain rose again, however. In an apparent attempt to pre-empt a new outbreak of unrest, the king announced that each Bahraini household would receive the equivalent of nearly $2,700 dollars. But the gesture seemed to fall short.
Two people were killed by security forces during a protest and a subsequent funeral earlier this week. After Thursday's attack, the government banned all public gatherings, while most opposition MPs resigned their seats.
Both Clinton and Pentagon chief Robert Gates called their Bahraini counterparts Thursday to urge restraint on the part of the government's security forces.
"I called my counterpart in Bahrain this morning and directly conveyed our deep concerns about the actions of the security forces, and I emphasised how important it was that, given there will be both funerals and prayers tomorrow, that that not be marred by violence," Clinton told reporters. Describing Bahrain as a "friend and an ally," she stressed that "all people have universal rights, including the right to peaceful assembly."
The administration is now trying to walk a tightrope, much as it has been doing with Egypt over the past four weeks.
"Washington is now faced again with another hard choice…," wrote Graham Fuller, a former senior CIA Mideast analyst who teaches at Simon Fraser University in Vancouver, in the International Herald Tribune on the eve of Thursday's attack. He warned that the naval base could be lost if the regime falls.
"Continue to go with local repressive regimes out of a misguided sense of 'American interests'? Hold on to unpopular military bases at all costs – thereby deepening local anger and perhaps giving Iran ultimately a greater voice in events?" he asked. "Or should it quietly drop support for this repressive regime, allow events to take their course and accept that long-overdue change is coming?"
"We should speak out more strongly in support of change and democratic process and stop clinging to traditional dictators even if they're pro-American," Fuller said in a telephone interview on Thursday.
"That is the way history is moving in the region, and we have to acknowledge that, rather than resist it," he noted, adding that, to protect its geo-strategic interests in the region, Washington should adopt more of an "off-shore" strategy and maintain "fewer boots on the ground".
Chas Freeman, a highly decorated retired diplomat who served as ambassador to Saudi Arabia during the Gulf War, agreed with the dilemma faced by Washington but came to a somewhat different conclusion.
"If you come out in favour of change, then you are at considerable risk of damaging your political-military equities. If you bow openly to expedience of military interests, then you are discrediting yourself morally and ideologically," said in an interview. "There are moments when silence and respect for the ability of others to straighten out their own politics may be the best course."
Freeman noted that much more besides the naval base could be at stake given Saudi Arabia's strong interest in the outcome of the current crisis.
"My guess is that the Saudis will not tolerate excessive unrest in Bahrain, not least because the Bahraini Shias are closely related by kinship to Saudi Arabia's Shias minority; that is, the portion of it that sits atop the oil fields in the Eastern Province," he said. "So what happens in Bahrain has considerable implications for what could happen in the Eastern Province."
Between 10 and 15 per cent of Saudi Arabia's population are Shia Muslims, a large majority of whom live in the Eastern Province, which produces most of the country's oil.
A version of this article first appeared on the Inter Press Service News Agency.