Bahraini security forces on Tuesday shot and killed at least one demonstrator during a security operation that included a raid on the home of the kingdom's Shi'ite Muslim spiritual leader.
Ayatollah Isa Qassim was not among the 50 people arrested during the raid, but the move is likely to raise tensions in Bahrain days after US President Donald Trump said Washington's relationship with the Sunni-ruled kingdom - long strained over its human rights record - would improve.
"The operation in Diraz was based on intel that several fugitives connected to serious acts of terrorism and the killing of a policeman were harbored in the village," a security official told Reuters, adding that six wanted people were arrested from the cleric's home in the village.
Qassim faces expulsion from the kingdom after authorities revoked his citizenship last year for alleged links to Iran and fomenting violence, charges he has denied.
Rights activists say the move to revoke Qassim's citizenship was part of a wider crackdown by the Sunni-ruled kingdom on the mainly Shi'ite Muslim opposition which had been demanding a bigger share in running the country.
Activists said one person identified as Mohammed Zein al-Deen was shot and killed by birdshot, adding that more than 100 other people were injured or suffered tear gas inhalation, with some in serious condition.
The interior ministry said in a statement that 50 wanted people were arrested in the Diraz raid.
The operation took place two days after a Bahraini court convicted Qassim of financial corruption and sentenced him to a suspended one-year jail term, but the security source said the raid did not target the cleric.
Images distributed by activists online showed a bulldozer clearing the encampment outside his house and about 20 masked policemen outside the gate of Qassim's house.
Reuters could not immediately verify their authenticity.
Ebtasam Alsaegh, from the neighboring village of Bani Jamra, told Reuters that mosques were calling residents on to the streets to protect Qassim.
"The situation is terrifying ... It's making people really angry and the young men are taking to the streets. The mosque speakers are calling out 'God is Great', urging people to come out and protect Sheikh Qassim," she said by phone.
Bahrain in 2011 crushed an uprising by its majority Shi'ite community, demanding reforms giving them more representation in the country ruled by the Sunni Al Khalifa monarchy.
The government believes the opposition seeks to overthrow it by force and believes its arch-foe Iran has aided in deadly militant attacks on security forces.
Bahraini MP Abdullah bin Huwail said in a statement that the security operation showed the government's resolve to confront an Iranian-backed security threat.
"Some areas in Diraz village had transformed into a teeming sanctuary embracing terrorists, saboteurs and fugitives from justice," bin Huwail, the head of the parliamentary council on national foreign affairs, defense and security council said.
"There is no dialogue with terrorism and terrorists, especially if the goal is to advance suzerainty on the part of the Iranian regime."
In his first visit to the Saudi capital Riyadh, Trump said on Sunday that Washington's relations with Bahrain were set to improve, after tensions with his predecessor Barack Obama over the kingdom's rights record.
Bahrain denies any discrimination or systematic excessive use of force.
Human Rights Watch condemned the Diraz raid as a crackdown on free expression. It said it was no coincidence it occurred two days after a "convivial" meeting between Trump and King Hamad.