While US and international attention is focused largely elsewhere in the region, especially Libya, the violent crackdown against protestors in the tiny island kingdom of Bahrain may well pose a bigger threat to the entire region's stability. The Bahrain situation is exposing long simmering tensions and rivalries between Saudi Arabia and Iran and carries the danger that it will trigger the next regional war. Such a scenario would likely draw in the United States at a time when its relationships with key allies in the region, especially Saudi Arabia, are under strain. Urgent action is therefore needed to de-escalate the situation in Bahrain and create the trust necessary for the government and opposition to start a much delayed national dialogue that charts the future of the country.

Worryingly, a senior unidentified Saudi official has described the mission of Saudi and other GCC troops to support the Bahraini security forces as "open-ended." A three month state of emergency has led to a campaign of house raids and arrests that have included the leaders of the main opposition parties, as well as human rights activists and other dissidents. There are also mounting concerns that these combined security forces are using disproportionate force and committing serious violations of international law and humanitarian law. The space for dialogue seems to be rapidly closing.

In the days ahead, we are likely to see a deepening of the culture of resistance in Bahrain. In particular, calls for dialogue to establish a constitutional monarchy may be swept away by more radical groups and the combative youth that increasingly supports them. Further radicalization of Bahrainis seems inevitable the longer the current impasse lasts, carrying with it the real danger that the country will be mired in a full blown civil war.

King Hamad bin Isa Al-Khalifa's invitation of the GCC forces has also posed new dilemmas and real dangers for the Gulf and the wider Middle East. It is a crisis which is assuming worrying regional and sectarian dimensions. If the Tunisian revolt was the springboard for the revolution in Egypt and it's catalytic effect on the peoples of the region, the crisis in Bahrain signals the first battle in the shaping of the new Middle East. Instead of the focus being on the people's revolts for dignity, justice, and greater democratic representation that are transforming the region, we are slipping back in to the old narratives that so dominated the region over the past two decades.

These decades were defined by three main narratives: the struggle between western-backed "moderates" and Iranian and Syrian backed "militants" such as Hamas and Hezbollah; the fight against Islamic extremism, particularly Al-Qaeda and the "war on terror" following September 11; and the growing mistrust between Shias and Sunnis, especially following the ouster of Saddam Hussein in Iraq. On top of these dynamics, the total failure of Israeli-Palestinian peace efforts and concern for Iran's nuclear ambitions have led many to predict that the region is heading towards war.

In the midst of the Arab peoples' awakenings of 2011, the Bahrain crisis has once again raised these specters. The result may be the transformation of the existing Saudi-Iranian "Cold War" to direct confrontations and the intensification of "proxy conflicts," already prevalent in the region.

For its part, the Iranian regime has responded swiftly to events in Bahrain, calling the GCC move an "occupation" and an "invasion" even as it continues to crush its own people's Green Revolution. As the situation in Bahrain deteriorates, Iran may seek creative ways to interfere, perhaps by using its proxies in Lebanon or Iraq. Iraq, Lebanon, and Hamas-led Gaza provide examples of Iran's ability to capitalize on chaos and conflict to further its interests in the region.

Worryingly, on Saturday, the Basij militia is reported to have attacked the Saudi consulate in the northern Iranian town of Mashhad. The Hezbollah chief also weighed in on Saturday by likening the Khalifa family to the Mubarak or Gaddafi families and called on his Bahrain "brothers to resist in defending your rights." He also added for good measure that "your blood and wounds will defeat the tyrants." The Bahrain government reacted angrily, called Nasrallah's speech a "terrorist speech" and warned the Lebanese government that it would hold it responsible for such statements "which would undoubtedly impact on bilateral relations."

The situation in Bahrain may well be providing Iran the opportunity to influence the emerging new regional order, which it has not been instrumental in creating or shaping till now.

The Bahrain crisis is also showing the limits of U.S. influence and power in a region vital to American interests. The Obama administration's calls to speed up political reforms and its more recent condemnation of the crackdown have fallen on deaf ears in Manama. Instead, King Hamad has sought counsel or been influenced by Bahrain's big brother, Saudi Arabia. For their part, the Saudis, increasingly upset with Washington, have warned both the United States and Iran not to interfere in Bahrain's affairs. We really are in unchartered territory.

Bahrain represents the clearest indication of a rupture in Saudi-US relations. As both struggle to manage the sweeping changes in the region, they seem to be on starkly different paths. Saudi Arabia, in particular, may have already determined that the US, especially President Obama, cannot be relied upon to safeguard well-established mutual interests in the region, including the protection of the Kingdom and the House of Saud itself. If this is the case, U.S. influence on Saudi Arabia may be nose-diving at a time when it is most needed. As the region enters a period of prolonged instability, increasingly sharp disagreements between the United States and Saudi Arabia may well be the biggest casualty of the Bahrain crisis.

This could result in Saudi ambivalence about raising its own output to keeping oil prices down -- something which would have a direct effect on gas prices in the US and internationally. More notably, Saudi leadership may make the GCC less reliant on US leadership and diminish further US influence and power in the region. Nevertheless, the United States, Europe, and others in the region must not falter in their calls to end the crackdown and pursue a political solution to the Bahrain crisis. Only a political solution can halt Bahrain's slide to civil war and avert a greater regional fallout.

The path to such a solution can be achieved in two steps: firstly by establishing a truce based on the ending of opposition protests, the release of all opposition leaders and activists, and the withdrawal from Bahrain of all GCC forces. Secondly, a time-bound national dialogue of two months should be possible based on the principles of enhancing political representation and accountability and the sharing of power. This dialogue should also serve as the basis for talks aimed at achieving the far-reaching goal of a "constitutional or parliamentary monarchy" in the country. It is a goal that King Hamad has previously set and which the mainstream opposition parties are demanding. It is now time to put aside sectarian concerns and deep seated existential fears and get on with the job of achieving this for the future of Bahrain, the Gulf region, and the entire Middle East. 

Salman Shaikh is Director of the Brookings Institution's Doha Center and Fellow at the Saban Center for Middle East Policy. Shaikh previously served as the Special Assistant for the Middle East and Asia to the United Nations Under-Secretary-General for Political Affairs and as an adviser to former UN Secretary-General Kofi Annan.