Hospital sources said two policemen and two protesters were killed and hundreds wounded in the assault that began a day after Bahrain declared martial law to quell worsening sectarian unrest that has sucked in troops from neighboring Gulf countries.

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.”

He said at least five people had been killed by security forces who fanned out across the capital Manama. There was no official word on casualties from authorities and there was no independent confirmation.

The full-scale assault launched at daybreak swept into Pearl Square. Stinging clouds of tear gas filled streets and black smoke rose from the square, possibly from the protesters’ tents set ablaze.

It was unclear whether the offensive included soldiers from other Gulf nations who were dispatched to help Bahrain’s Sunni monarchy, which has been under relentless pressure from the country’s majority Shiite Muslims to give up its monopoly on power.

But 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.

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 was at a crawl.

Hamid Zuher, a 32-year-old protester who slept at the square, said riot police first moved in on foot through a haze of tear gas, firing in the air.

“They fired tear gas and then opened fire,” Zuher told the Associated Press.

“We lifted our arms and started saying ‘Peaceful, Peaceful.’ Then we had to ran away. There was so much tear gas and shooting.”

Just a ‘symbolic blow’

In Shiite villages, people went to mosques to pray in a sign of protest against the Pearl Square crackdown. 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 protest gatherings or a surge of people toward the capital.

The official Bahrain news agency said the emergency rule bans “rallies and disrupting the public order” and imposes “movement restrictions” and possible curfews in some locations.

For Bahrain’s authorities, clearing Pearl Square would be more of a symbolic blow against protesters than a strategic victory as opposition groups are still be able to mobilize marches and other actions against the leadership.

Bahrain’s king on Tuesday declared a three-month state of emergency and instructed the military to battle unrest in the strategic nation. Shortly after the announcement, clashes erupted across the island nation, killing at least two civilians.

Bahrain’s sectarian clash is increasingly viewed as an extension of the region’s rivalries between the Gulf Arab leaders and Shiite powerhouse Iran. Washington, too, is pulled deeply into the Bahrain’s conflict because of it’s key naval base — the Pentagon’s main Gulf counterweight to Iran’s growing military ambitions.

On Tuesday, Iran and it’s allied force in Lebanon, Hezbollah, denounced the presence of foreign soldiers in Bahrain. 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.

Gulf rulers fear that the collapse of Bahrain’s Sunni monarchy could embolden further revolts across the region.

The state of emergency in the US-backed regime gives Bahrain’s military chief wide authority to battle protesters demanding political reforms and equal rights for the majority Shiites.

Call for restraint

Also Tuesday, Secretary of State Hillary Rhodium Clinton expressed alarm over “provocative acts and sectarian violence,” and said she telephoned Saudi Foreign Minister Prince Saud to stress the need for the foreign forces to promote dialogue.

“We call for calm and restraint on all sides in Bahrain,” Clinton told reporters in Cairo, where she was urging on democratic currents that chased Egypt’s Hosni Mubarak from power last month.

Meanwhile, the Pentagon authorized military family members and civilians with non-emergency jobs to leave Bahrain as violence spread.

The intervention of more than 1,000 Saudi-led troops from several Gulf nations was the first major cross-border military action to challenge one of the revolts sweeping across the Arab world. The Al Khalifa family has ruled Bahrain for 200 years.

The foreign troops are from the six-nation Gulf Cooperation Council’s Peninsula Shield Force. The bloc is made up of Saudi Arabia, Oman, Kuwait, Bahrain, Qatar and the United Arab Emirates — all largely Sunni countries that have nervously watched the Arab world’s protests.

Iran denounced the foreign intervention as “unacceptable” and predicted it would complicate the kingdom’s political crisis.

A senior Bahraini foreign affairs official, Hamad Al-Amer, called the remarks “blatant intervention in internal Bahraini affairs” and said Iran’s ambassador to Bahrain was summoned to the Foreign Ministry.