Despite offers of dialogue, anti-government protests continue in the capital Manama [AFP]

The US president has expressed his support  for an effort at "national dialogue" in Bahrain, and said it should be "inclusive, non-sectarian and responsive" to the people of the Gulf kingdom.

Barack Obama's statement on Sunday comes amid continued protests and a day after King Hamad bin Issa al-Khalifa reshuffled his cabinet and allowed the return of an exiled opposition leader after 13 days of protests.

"The United States supports the national dialogue initiative led by Crown Prince Salman bin Hamad al-Khalifa, and encourages a process that is meaningful, inclusive, non-sectarian, and responsive to the people of Bahrain," he said.

Bahrain, a tiny, oil-rich kingdom which has Sunni rulers governing over a Shia majority, houses the headquarters of the US Navy's Fifth Fleet.

Washington has sought to walk a fine line between supporting its strategic ally and backing the democratic aspirations of Bahrainis, who were inspired by uprisings in Tunisia and Egypt.

"The dialogue," Obama added "offers an opportunity for meaningful reform and for all Bahrainis to forge a more just future together.

"As a longstanding partner of Bahrain, the United States continues to believe that Bahrain's stability will be enhanced by respecting the universal rights of the people of Bahrain and reforms that meet the aspirations of all  Bahrainis."

Meanwhile on Saturday, Hassan Mashaima, a leader of a banned opposition party, returned home from self-imposed exile in Britain to a hero's welcome in the Pearl Roundabout, the focal point of the protest movement.

But on Sunday, thousands of Bahrainis marched in the capital Manama calling for the fall of the ruling monarchy, as 18 members of parliament from al-Wefaq Shia opposition bloc resigned to  protest the deaths of demonstrators, seven of whom have been killed by security forces since the protests began on February 14.

Mullen visits

On Friday, the White House dispatched Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, to Bahrain.

During his visit, he reaffirmed Washington's commitment to King Hamad.

Mullen also accused Iran of fomenting instability, but said the neighbouring country was not behind the popular protests in several regional countries.

The US is not alone in its careful approach to Bahrain.

Foreign ministers of the six-nation alliance of the Gulf Cooperation Council (GCC), of which Bahrain is a member, said last week that their political, economic, security and defence support for Bahrain would continue.

The GCC members - Bahrain, Qatar, Kuwait, Oman, Saudi Arabia and the United Arab Emirates - together sit on 45 per cent of global crude reserves and just under a fifth of the world's oil supplies.

Bahrain, with a population 740,000, gained independence from Britain in 1971.

The al-Khalifa family took control of Bahrain from the Persians in the late 1700s and soon after became a British protectorate.

Source: Agencies