|Shia Muslim protesters accuse the Sunni rulers of discriminating against the island's Shia majority [Reuters]
Tens of thousands of protesters have taken to the streets in Bahrain in the possibly biggest demonstration since unrest began last week.
Demonstrators circled the Bahrain Mall and the financial district of Manama, the capital, on Tuesday, in a march to the heart of the protest at Pearl roundabout.
"We want the fall of the government" was the most common chant among the mainly Shia Muslim protesters who accuse the Sunni rulers of discriminating against the island's Shia majority.
Led by opposition groups such as Wefaq and Waad, it was the first organised demonstration and followed spontaneous protests by a rising youth movement relying on social media.
Helicopters hovered overhead but security forces offered no resistance after opening fire on protesters last week.
"Some want the [ruling] family out but most [want] only the prime minister [to quit]," Abbas al-Fardan, a protester, said.
"We want a new government, the people need to rule the country."
The widow of one of the seven people killed in a crackdown on protesters read a statement outlining the opposition's demands, which centre on the current government's resignation and the replacement of the ruling Sunni al-Khalifa dynasty with a constitutional monarchy.
The statement also demanded an immediate, "impartial" probe to identify and try those behind the killings and reiterated opposition calls for the formation of a "national salvation" government.
"We don't have a problem if elections bring a Sunni or a Shia ruler," Saeed, a protester, said.
"The most important thing is to have egalitarian distribution of wealth among both communities."
Shias account for about 70 per cent of the population but are a minority in Bahrain's 40-seat parliament.
The al-Khalifa dynasty has ruled Bahrain for 200 years, and the family dominates a cabinet led by the king's uncle, who has been prime minister since independence in 1971.
Meanwhile, Hassan Mushaimaa, leader of the opposition Haq movement, had vowed to return to Bahrain on Tuesday from London where he is based.
He is one of 25 people on trial since last year over an alleged coup plot but a statement by King Hamad bin Isa al-Khalifa on Monday hinted that the trial would be shelved, allowing Mushaimaa an unhindered return.
But a friend of Mushaimaa said the opposition leader had been unable to board his flight to Bahrain from Beirut where he had landed earlier for a planned stopover.
Political prisoners released
State media said the king had ordered the release of convicted prisoners whose names would be released on Wednesday and a stop to ongoing court cases.
At least 50 prisoners were released including 25 Shiite activists on trial since last year for plotting against the state, Abdul Jalil Khalil, a leading member of Bahrain's Shiite opposition, told Associated Press news agency.
The US praised Bahrain's leadership on Tuesday for having announced steps towards opening a national dialogue, releasing political prisoners and permitting peaceful demonstrations.
"We commend the steps taken by King Hamad as well as Crown Prince Salman and others to restore calm to Bahrain, to allow peaceful demonstrations to take place," PJ Crowley, the state department spokesman, said.
"We view recent announcements to launch a national dialogue and the release of political prisoners as positive steps towards addressing the concerns of Bahraini citizens."
Hillary Rodham Clinton, U.S. Secretary of State, said the United States welcomed the king's decision to release the prisoners and "initiate a meaningful dialogue with the full spectrum of Bahraini society."
"As we have said, these steps need to be followed by concrete actions and reform," she said. "There is no place for violence against peaceful protesters."