Reconciliation talks between Bahrain's Sunni monarchy and the Shiite opposition have started for the first time since anti-government protests erupted in the Gulf kingdom, an opposition figure said.
The protests that began in February - inspired by wider Arab uprisings - have been the gravest challenge to any Gulf ruler in decades.
Washington has pushed for dialogue in the strategic island nation, home to the US Navy's 5th Fleet.
The opposition figure, who spoke anonymously, said the government-led talks took place behind closed doors in the capital Manama's convention centre.
The talks are due to last until the end of the month, with about 300 delegates from government-linked groups and opposition parties meeting three times a week.
How the country's rulers approach the so-called National Dialogue largely depends on how comfortable neighbouring Saudi Arabia is with Bahrain's Sunni leaders making concessions to the country's Shiite majority, which makes up around 70% of the kingdom's population of about 525,000.
Saudi Arabia does not have a seat at Bahrain's crisis talks, but it carries a critical voice in everything from the tone of the debate to the eventual offers on the table.
"Saudi Arabia wants dialogue since confrontation is not the Saudi way of dealing with things," said Marina Ottoway, director of the Middle East Programme at Washington DC-based think-tank the Carnegie Endowment for International Peace.
She believes that Riyadh is fully behind the reconciliation talks because they are designed by the government and cannot be seen as turning into "negotiations between the monarchy and the people".
Saudi's King Abdullah deployed about 1,000 troops to Bahrain, at Manama's request, during the uprising earlier this year to help quell protests.
For the powerful Saudi royal family and its Gulf partners, any setbacks by Bahrain's 200-year-old ruling Al Khalifa dynasty is considered a threat to all monarchs and sheikhs in the Gulf.
To rein in protesters, Bahrain's government also arrested hundreds of people and temporarily instated an emergency law. At least 32 people were killed in the unrest, according to international rights groups.
Many of Bahrain's Shiites claim they are the target of systematic discrimination, including being blocked from top military and political posts.
Gulf leaders have accused Iran of influencing the Shiite-led uprising in Bahrain.
Regional governments were concerned that similar revolts may be copied elsewhere in the region and that Bahrain's Shiite-led uprising could serve as a possible opening for Iran to make headway among pro-Western Gulf states anchored by Saudi Arabia.
Bahrain's opposition leaders have repeatedly denied claims that Iran had any role in the protests.
For its part, Iran has relentlessly assailed Bahrain's rulers for crackdowns against the country's Shiite majority and called the Saudi-led Gulf troop presence an "occupation" army.
One of the opposition's demands was that the Saudi-led force leave the kingdom before any talks with the Sunni monarchy started. However, foreign troops remain deployed and talks have begun.
"The presence of foreign troops is part of Bahrain's problem, not the solution," said Ali Salman, the leader of Bahrain's largest Shiite opposition party, Al Wefaq, which reluctantly joined the government-designed reconciliation talks.
United Nations secretary general Ban Ki-moon welcomed the start of the national dialogue, noting the government's establishment of an investigation commission, the transfer of some trials to civilian courts, and the release of some detainees and encouraging Bahraini authorities to take further steps to comply with their international human rights obligations, UN spokesman Martin Nesirky said.
Hundreds of protesters, however, remain imprisoned awaiting trial on charges ranging from trying to topple the government to participating in illegal protests.