Soldiers and riot police expelled hundreds of protesters from a landmark square in Bahrain's capital on Wednesday, using tear gas and armored vehicles to try to subdue the growing movement challenging the 200-year-old monarchy.
At least five people were killed as clashes flared across the kingdom, according to witnesses and officials.
U.S. officials warned Bahrain against violent crackdowns.
The unrest that began last month has increasingly showed signs of a sectarian showdown: More than 60 percent of Bahrainis are Shiites and they complain of discrimination at the hands of the Sunni royal family, the al-Khalifa. Most Shiites want a constitutional monarchy but calls by some hardliners for the overthrow of the monarchy have alarmed the Sunni minority, which fears that unrest could serve non-Arab Shiite power Iran.
Wednesday's full-scale assault launched at dawn in Pearl Square, the center of the uprising inspired by Arab revolts in Egypt and Tunisia.
A member of parliament from the largest Shiite Muslim opposition group denounced the government assault as a declaration of war on the Shiite community.
"This is war of annihilation. This does not happen even in wars and this is not acceptable," Abdel Jalil Khalil, the head of Wefaq's 18-member parliament bloc, said. "I saw them fire live rounds, in front of my own eyes."
Hours later, security forces were picking through burned debris and other remains of the protest camp.
In another area of Bahrain, one witness described police in a village "hunting" Shiites in what could be part of a wider campaign of intimidation.
The king's announcement Tuesday of a three-month emergency rule and the crackdown on Pearl Square sent a message that authorities will strike back with overwhelming force.
The United States on Wednesday objected to what it called "excessive force and violence" used against Bahrain protesters and said it had "raised our concerns directly" with Bahrain, the State Department said in a message on Twitter.
The U.S. is a close ally of the island nation, home to the U.S. Navy's 5th Fleet.
In Washington, President Barack Obama called both King Hamad bin Isa Al Khalifa of Bahrain and King Abdullah of Saudi Arabia to express deep concern over the violence in Bahrain. He "stressed the need for maximum restraint," White House spokesman Jay Carney told reporters. Obama "also stressed the importance of a political process as the only way to peacefully address the legitimate grievances of Bahrainis and to lead to a Bahrain that is stable, just, more unified and responsive to its people."
Secretary of State Hillary Clinton called the situation "alarming" and said Bahrain and neighbors were on "the wrong track" by trying to quell unrest with troops instead of reform.
"We have deplored the use of force," Clinton told reporters in Cairo before flying to Tunis. "We have said not only to the Bahrainis but to our Gulf partners that we do not think security is the answer to what is going on."
Bahrain has been gripped by its worst unrest since the 1990s after protesters took to the streets last month, inspired by uprisings that toppled the leaders of Egypt and Tunisia.
Unlike those countries, where the mainly Sunni populations united against the regime, Bahrain is split along sectarian lines, raising the risk of a slide into civil conflict.
The latest crackdown raised the stakes in the crisis between the country's Shiite majority and its dominant Sunni minority.
A 1,000 soldier Saudi-led force from Gulf allies — fearful for their own regimes and worried about Shiite Iran's growing influence — highlighted that the conflict in Bahrain was part of region-wide hostilities between Sunni Gulf Arab countries and non-Arab Shiite Iran.
Security forces barred journalists and others from moving freely around Manama and other areas of the country a day after emergency rule was declared. A 4 a.m. to 4 p.m. curfew was imposed in most of the country.
Witnesses said at least two protesters were killed when the square was stormed. Officials at Ibn Nafees Hospital said a third protester who later died from wounds. The witnesses spoke on condition of anonymity because of fears of reprisals from authorities.
But a government statement said the only fatalities during the raid were two policemen who were "repeatedly run over by three vehicles containing protesters leaving the fringes of the scene." The Interior Ministry also said a policeman was killed late Tuesday.
The government did not say whether the offensive included soldiers from other Gulf nations.
State TV broadcast video showing military vehicles in the square flying Bahrain's red-and-white flag as security officials moved through the wreckage of the encampment, set up at the base of a towering monument to the country's history as a pearl diving center. The video showed the ground littered with debris, including satellite dishes and charred tent poles.
Helicopters crisscrossed over the square, which was cleared by security forces late last month but was later retaken by protesters after a deadly confrontation with army units.
During the attack, protesters fled for cover into side streets and security forces blocked main roads into Manama. Mobile phones were apparently jammed in central Manama during the height of the attack and Internet service remained at a crawl.
Hamid Zuher, a 32-year-old protester who slept at the square, said riot police first moved in on foot.
"They fired tear gas and then opened fire," Zuher said. "We lifted our arms and started saying 'Peaceful, Peaceful.' Then we had to run away."
The government presented a different story, saying security forces came under attack from about 250 "saboteurs" hurling Molotov cocktails and later fired back with tear gas. It said no live ammunition was used.
Clashes in Bahraini villagesAmbulances had moved toward Pearl Square Wednesday morning, CNBC said, though there were reports that they weren't allowed to access the roundabout and that the injured weren't able to receive adequate medical care because the military had sealed off hospitals.
In Shiite villages, people went to mosques and held protest prayers. Others lit fires in anger. Clashes were reported in other mostly Shiite areas of the country, where traffic was tightly controlled by military forces in an apparent attempt to prevent gatherings or a surge of people toward the capital.
Militias reportedly opened fire at random in mainly Shiite areas of Bahrain, where guns are banned, leading to speculation that the militias were actually security forces, CNBC reported. Royal sources said the fighting was only between civilians, who were armed.
Bahraini defense forces were poised to stamp out any unrest in the town of Hidd, sources told CNBC, with troops stacking sandbags mounted with 50-caliber guns on top at the entrance to the town.
In the Busaiteen area, masked youths set up checkpoints, halting traffic, CNBC said. Locals set up medical centers in come villages because they had not been allowed to take the wounded to hospitals, CNBC reported.
In Sitra, resident Rania Ali said police were charging after Shiites even as they ran for shelter.
"I'm scared. I can't move from my house," said Ali, who is a Sunni married to a Shiite man. "I saw them chasing Shiites like they were hunting ... It is a cleansing war against our Shiite brothers."
Roadblocks around the country also prevented injured protesters from reaching the main state hospital, which was working on generator power. The extent of the blackout in Manama was not immediately clear.
The official Bahrain news agency said the emergency rule bans "rallies and disrupting the public order," restricts movement and could imposes curfew.
For Bahrain's authorities, clearing Pearl Square would be more of a symbolic blow against protesters than a strategic victory. Opposition groups can still mobilize marches and take other actions against the leadership.
Bahrain's sectarian clash is increasingly viewed as an extension of the region's rivalries between the Gulf Arab leaders and Iran. Washington, too, is pulled deeply into the Bahrain's conflict because of its key naval base — the Pentagon's main Gulf counterweight to Iran's growing military ambitions.
Iranian President Mahmoud Ahmadinejad on Wednesday denounced the Bahraini government's crackdown and the presence of the Saudi-led force.
"The people's demands for change must be respected. How is it possible to stop waves of humanity with military force?" Ahmadinejad said, according to Iranian state TV.
Iran has no direct political links with Bahrain's main Shiite groups, but Iranian hard-liner in the past have called the tiny island nation that "14th Province" of the Islamic Republic.
On Tuesday, Secretary of State Hillary Rodham Clinton had expressed alarm over "provocative acts and sectarian violence," and said she telephoned Saudi Foreign Minister Prince Saudi to stress the need for the foreign forces to promote dialogue.
The Pentagon has authorized military families and civilians with non-emergency jobs to leave Bahrain.
The international credit agency Fitch Ratings cut its rating on Bahrain's sovereign wealth fund Mumtalakat by two notches Wednesday.
In mostly Shiite southern Iraq, more than 4,000 people joined a march calling for the Arab League to halt attacks on Bahraini civilians. "Bahrain is the Gaza of the Gulf," some chanted in reference to past Israeli attacks on the Gaza Strip.