Security forces opened fire on protesters in Bahrain for a second day, wounding at least 50 people as thousands defied the government in an uprising that seeks to break the political grip of the Gulf nation's leaders.

Again, authorities showed no hesitation in using force against demonstrators in the capital Manama, who marched towards Pearl Square, stepping up their demands to bring down the ruling monarchy.

US president Barack Obama condemned the use of violence against the protesters in Bahrain, as well as in Libya and Yemen, where heavy crackdowns by old-guard regimes were reported.

A Libyan doctor said 35 protesters were killed in the eastern city of Benghazi during a confrontation with security forces, while four people were killed and 48 wounded during protests called as part of a "Friday of Rage" in Yemen.

The continuing wave of anger in the Arab world followed successful uprisings in Tunisia and Egypt, where hundreds of thousands of people celebrated the downfall of President Hosni Mubarak a week ago.

In Bahrain, critically-injured protesters were again rushed to Manama's main Salmaniya hospital, which also received the dead and wounded after riot police smashed a protest encampment early on Thursday in the landmark square.

Some medics were in tears as they tended to the wounded. X-rays showed bullets still lodged inside victims.

"This is a war," said Dr Bassem Deif, an orthopaedic surgeon examining people with bullet-shattered bones.

Of the 50 injured, seven were critical, a Health Ministry official said. Seven people have died in Bahrain's unrest this week, including five on Thursday, and more than 200 have been wounded.

Yesterday protesters described a chaotic scene of tear gas clouds, bullets from many directions and people slipping in pools of blood as they sought cover. Some claimed the gunfire came from either helicopters or sniper nests.

An Associated Press cameraman saw army units shooting anti-aircraft weapons, fitted on top of armoured personnel carriers, above the protesters, in apparent warning shots and attempts to drive them back from security cordons about 200 yards from the square.

Then the soldiers turned firearms on the crowd, one marcher said.

"People started running in all directions and bullets were flying," said Ali al-Haji, a 27-year-old bank clerk. "I saw people getting shot in the legs, chest, and one man was bleeding from his head."

"My eyes were full of tear gas, there was shooting and there was a lot of panic," said Mohammed Abdullah, a 37-year-old businessman taking part in the protest.

The clash came hours after funeral mourners and worshippers at Friday prayers called for the toppling of the Western-allied monarchy in the tiny island nation that is home to the US Navy's 5th Fleet, the centrepiece of the Pentagon's efforts to confront Iranian military influence.

Some members of Bahrain's Sunni ruling system worry that Shiite powerhouse Iran could use Bahrain's majority Shiites as a further foothold in the region.

Mr Obama discussed the situation with King Hamad bin Isa Al Khalifa of Bahrain early today, asking him to hold accountable those responsible for the violence. He said Bahrain must respect the "universal rights" of its people and embrace "meaningful reform".

"I am deeply concerned about reports of violence in Bahrain, Libya and Yemen. The United States condemns the use of violence by governments against peaceful protesters in those countries and wherever else it may occur," Mr Obama said.

"The United States urges the governments of Bahrain, Libya and Yemen to show restraint in responding to peaceful protests and to respect the rights of their people."

Bahrain's king appointed Crown Prince Salman bin Hamad Al-Khalifa to lead a dialogue "with all parties", though it was unclear whether furious protesters would respond to the overture.

Speaking on Bahrain state TV, the prince expressed condolences for "these painful days" and called for unity.

"We are at a crossroads," he said. "Youths are going out on the street believing that they have no future in the country, while others are going out to express their love and loyalty. But this country is for you all, for the Shiites and Sunnis."

The cries against the king and his inner circle - at a main Shiite mosque and at burials for those killed in Thursday's crushing attack - reflect a sharp escalation of the political uprising, which began with calls to weaken the Sunni monarchy's power and address claims of discrimination against the Shiite majority.

The mood, however, has turned towards defiance of the entire ruling system after the brutal crackdown in Pearl Square, which put the nation under emergency-style footing with military forces in key areas and checkpoints on main roads.

"The regime has broken something inside of me. ... All of these people gathered today have had something broken in them," said Ahmed Makki Abu Taki at the funeral for his 23-year-old brother Mahmoud, who was killed in the pre-dawn sweep.

"We used to demand for the prime minister to step down, but now our demand is for the ruling family to get out."