Bahrain's king declared a three-month state of emergency on Tuesday as Iran strongly condemned a military intervention by Gulf troops to help put down Shiite-led unrest in the Sunni-ruled kingdom.
Thousands of protesters marched to the Saudi embassy chanting slogans against King Hamad and vowing to defend the country from the "occupation" forces, as unrest in the tiny country became a regional diplomatic crisis.
Bahrain recalled its ambassador to Tehran after the Iranian government condemned the arrival of Saudi-led Gulf Arab forces in the archipelago and defended the "legitimate" demands of the mainly Shiite opposition protesters.
The financial district of Manama -- a regional banking hub -- was deserted for a third day.
Shops and malls were shuttered and Sunni and Shiite vigilantes were in the streets in various parts of the capital and rural villages.
The protesters, some wearing white to symbolize their readiness to die as martyrs, waved banners against the king as they marched to the Saudi embassy to condemn the "occupation" forces.
They also called for unity between Sunnis and Shiites in the mainly Shiite country, which has been ruled by a Sunni dynasty for more than 200 years.
"Sunnis and Shiites stand hand-in-hand," they chanted.
Police and foreign forces were nowhere to be seen, witnesses said.
"We are ready to fall as martyrs for the sake of our homeland," said a 17-year-old girl, Nour Abdullah, who was wearing white.
A 30-year-old man who gave his name as Ghazi said the troops who arrived from Saudi Arabia and the United Arab Emirates -- part of the Gulf countries joint Peninsula Shield Force -- were an army of occupation.
"The Peninsula Shield Force is supposed to be there to protect the countries of the Gulf and not to be used against the people," he said.
A Shiite protester and a member of the security forces were killed in separate incidents in the south of the archipelago, amid unconfirmed reports of bloody clashes outside of the capital.
State television interrupted normal programming to announce a three-month state of emergency in the strategic Gulf state, which is home to the U.S. Fifth Fleet and major international banks and finance institutions.
"The Commander in Chief of the Bahrain Defense Force has been mandated to take the measures and procedures necessary to preserve the safety of the nation and its people," it said, adding "other forces" could also be used if necessary.
Armored troops from Saudi Arabia and the United Arab Emirates had earlier rolled across the causeway from Saudi's Eastern Province to help Manama deal with pro-democracy protests which have shaken the kingdom for the past month.
Saudi Arabia's staunchly Sunni government said it had responded to a call for help from its neighbor under a mutual defense pact of the six-country Gulf Cooperation Council (GCC).
But Iran condemned the intervention as unacceptable and summoned the ambassadors of Saudi Arabia and Switzerland, which represents U.S. interests in the Islamic republic, as well as Bahrain's charge d'affaires to complain.
"The Islamic Republic of Iran considers America responsible for the dangerous consequences of this illegal action," an unnamed Iranian diplomat told Swiss ambassador Livia Leu Agosti, state television reported.
Foreign ministry spokesman Ramin Mehmanparast said: "The people of Bahrain have demands, which are legitimate and are being expressed peacefully. Any violence in response to these legitimate demands should be stopped."
Bahrain's state news agency said the Gulf kingdom had "decided to immediately recall its ambassador in Tehran for consultation," as the country's crisis widened into a broader standoff between Iran and the Arab Gulf states.
Tehran's criticism "is a blatant interference in Bahrain's internal affairs from a country which is supposed to have good neighborly relations with the kingdom," state news agency BNA quoted foreign ministry undersecretary Hamad al-Amer as saying.
"Bahrain is in contact with the United Nations, the Security Council’s permanent members, the GCC (Gulf Cooperation Council) member states, the Arab League and the Organization of Islamic Conference regarding the blatant Iranian interference," Amer said.
"Bahrain strongly denounces and absolutely rejects the Iranian statement, which is considered an intervention in its domestic affairs and a threat to regional and international peace and security."
The United States warned Gulf states to respect the rights of the people of Bahrain but said the entry of foreign troops was "not an invasion" and declined to call for them to be pulled back
U.S. Defense Secretary Robert Gates held talks with Bahrain's rulers in Manama on Saturday and urged them to undertake significant reform. He said there was no evidence that Iran was behind the unrest.
The United States joined Britain and Australia in urging its citizens to avoid unnecessary travel to Bahrain and consider leaving the country.
Meanwhile the European Union urged "utmost restraint" in Bahrain and called on the security forces to respect "fundamental freedoms including the right to assemble freely and peacefully," a spokeswoman said.
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