Bush's Middle East tour, which started in Israel, takes in the UAE and Saudi Arabia before ending in Egypt on Wednesday.
The visit aims to drum up support against what Bush calls the Iranian threat and bolster the US role in Israel-Palestinian peace negotiations.
Earlier, Bush became the first US president to visit Bahrain, when he was greeted at the airport by King Hamad bin Isa al-Khalifa. Later, Bush held talks with Hamad.
In Manama, tight security was evident as police and special forces deployed along the main roads, to monitor a peaceful protest that greeted Bush.
Protesters waving Shia Lebanese Hezbollah, Palestinian and Bahraini flags, carried banners that read "Bush, you care about one Israeli prisoner but what about 10,000 Palestinian civilian prisoners?"
They also carried giant poster for Bush, under which they wrote in English: "Aggression against Iraq people is a war crime and a genocide."
Protesters also chanted slogans: "US base out of Bahrain."
Around 400 activists in Bahrain made it clear that they do not share the government's enthusiasm about Bush's visit to the Gulf archipelago.
Several political groupings, mainly from the opposition, organised a picket outside the US embassy in Manama after Bush's arrival.
Ibrahim Sharif, secretary general of the National Democratic Action Association, one of the groups organising the protest, said: "We want to tell the US president that he is not welcome, and that he is not a friend of Arab and Bahraini peoples."
Sharif said the US administration supports "tyrannical regimes" in the Arab world and favours Israel.
"President Bush praises the Bahraini regime saying it is democratic and reformist ... This is just politicians complimenting each other."
Sharif warned that taking part in or aiding any US military attack against Iran would be fatal for the Bahraini people due to the US military presence on their soil.
Two protests, approved by authorities, against the US president's visit took place on the eve of Bush's arrival.
Earlier, in Kuwait, Bush told troops at a US military base that "hope is returning to Iraq" because of the troop surge he ordered a year ago, but warned US forces would likely remain in Iraq beyond his presidency.
He maintained his long-held stance that a reduction in force levels will depend on conditions in Iraq, and that he would defer to General David Petraeus, the US military commander, who is scheduled to make a recommendation in March.
"My attitude is if he didn't want to continue the drawdown, that's fine with me," Bush said.
"The only thing I can tell you is we're on track for what we've said was going to happen," he said, referring to plans to withdraw some 30,000 troops from Iraq by July.