Security forces in Bahrain have dispersed thousands of anti-government protesters in Pearl Square in the centre of the capital, Manama.
Hundreds of riot police using tear gas and batons moved in before dawn, with tanks now reported on some streets.
At least three people died in the operation, with hundreds more injured.
The protesters want wide-ranging political reforms and had been camped out since Tuesday. Officials said all chance of talks had been "exhausted".
Clashes earlier in the week left two dead and dozens injured in the country.
The unrest comes amid a wave of protests that has swept through several Arab nations and led to the presidents of Tunisia and Egypt resigning.
Ibrahim Sharif, of Bahrain's secular Waad party, told the BBC that the police had moved into Pearl Square at about 0300 (2400 GMT) as people were sleeping.
"Throughout the day there were rumours that we would have another 24 hours, but the attack has come without warning," he said.
Mr Sharif said that he had seen at least 100 riot police on one side of the square and hundreds of people running away down side roads.
One protester, Mohamed, told the BBC the attack had been "horrifying".
"They should have used water hoses at first instead of using rubber bullets and other prohibited weapons. There were women and children who were terrified by the attack."
On Thursday morning there were angry scenes outside Manama's main hospital, Salmaniya, as hundreds of people gathered, some answering calls to donate blood and others defacing images of the Bahraini royal family.
One Bahrain resident, known only as Ali, who went to donate blood, told the BBC: "Lots of people are standing at the gates of the hospital. The police have closed the area so that no people can get in or out - some tried to get out and were shot at by police.
"There are many tanks, and helicopters hovering around."
Barbed wire has now been erected on roads leading to the square and the interior ministry has warned people to stay off the streets.
Mr Sharif told the BBC the protests would continue.
"We are going to do what's necessary to change this into a democratic country, even if some of us lose our lives," he said.
"We want a proper, functioning, constitutional democracy."
The demonstrators say they also want political prisoners to be released, more jobs and housing and the removal of Prime Minister Sheikh Khalifa Bin Salman Al Khalifa, who has been in office for 40 years.
'Refused to submit'
Ahead of the storming of the square, the US had expressed concern at the violence and called for restraint and respect for the "universal rights of its citizens" and "their right to protest". Bahrain is a key US ally and hosts the US Navy's Fifth Fleet.
White House spokesman Jay Carney said the US was "watching events from Bahrain and around the region very closely".
But Bahrain's authorities defended their actions.
"The security forces evacuated Pearl Square [...] after having exhausted all chance of dialogue," interior ministry spokesman Gen Tarek al-Hassan said, in a statement from the official news agency BNA quoted by AFP.
He said that as some "refused to submit to the law" they had to intervene to disperse them.
The editor-in-chief of Bahrain's Akhbar al-Khalij newspaper, Anwar Abdul Rahman, also told the BBC the authorities had acted appropriately: "When a group of people want to [hold] the government and society for ransom, the government has no choice but to take appropriate action."
Since independence from the UK in 1971, tensions between the Sunni elite and the less affluent Shia have frequently caused civil unrest. Shia groups say they are marginalised, subject to unfair laws, and repressed.
The conflict lessened in 1999 when Sheikh Hamad bin Isa Al Khalifa became emir. He began a cautious process of democratic reform. In 2002, he proclaimed himself king and landmark elections were held.
But the opposition boycotted them because the appointed upper chamber of parliament was given equal powers to the elected lower chamber.
In a rare TV appearance on Tuesday, Sheikh Hamad expressed regret about the deaths of protesters and said he would continue with reform.