MANAMA (Reuters) - Saudi Arabia wants Bahrain's government and opposition to resolve a political crisis that it fears could worsen because of the sectarian fallout of fighting in Syria and destabilise its Eastern Province, a diplomat and opposition politician said.
Bahrain has been in turmoil since the Arab Spring protest movement first erupted a year ago. Clashes have become a daily occurrence, usually in districts populated by majority Shi'ite Muslims who have dominated the protests.
"We heard that at end of January the Saudis were reaching out to Wefaq and wanted to hear how Wefaq - if Act 1 was last year - how they were going to play their role in Act 2," a senior Western diplomat said.
The leading Shi'ite opposition party Wefaq was involved in backroom talks during a pro-democracy uprising last year on reforms offered by Crown Prince Salman, but the they were cut short when Saudi troops rolled in and martial law was imposed.
The revolt was led by Shi'ite Muslim majority population on an island which is important to Washington as the base for the U.S. Navy's Fifth Fleet.
The Shi'ite majority has called for sweeping democratic reforms that would reduce the Sunni ruling family's monopoly on power and allow parliament real powers to legislate and form governments.
One year on clashes between riot police and youths in Shi'ite districts have escalated, with heavy use of petrol bombs against police who in turn use large amounts of tear gas. Activists say at least 32 have died since martial law ended, though police question the causes of death.
In January Wefaq members met with Royal Court Minister Khaled bin Ahmed for preliminary discussions on a formal dialogue on democratic reforms.
The diplomat said Wefaq, which faces radicalisation among many Shi'ite youth who oppose the monarchy, had met for a second time with the minister in recent weeks.
"There is stuff going on but it's getting more difficult than they imagined it would be. They are finding it difficult to get common ground," he said, citing government fears that Wefaq would command a parliamentary majority.
"You can foresee a political solution here that would keep the Saudis very happy, but I think the red lines would be slightly tighter than last year," he added.
Analysts say Riyadh sent troops last year because of alarm that Bahrain had not contained protests that had the potential to spill over into the Shi'ite Eastern Province region, where major Saudi oilfields are located.
An opposition politician, who did not wish to be named, said Saudi Arabia now feared that the conflict in Syria, in which Shi'ite Iran and its ally Hezbollah back Bashar al-Assad's rule, could sharpen Bahrain's sectarian divide - detracting attention from Syria and firing up Saudi Shi'ites.
"The Saudis are worried (the stalemate) could push the Shi'ites towards Iran... and at what could emerge as a consequence of Syria," he said.
Loyalist Sunni groups in Bahrain, who look to the ruling Al Khalifa for protection, have held protests against Assad and accuse Shi'ites of sympathy for Assad.
Media in Iran and Hezbollah give positive coverage to Bahrain's Shi'ite opposition, and Iraqi Shi'ites often demonstrate in support of their Bahraini coreligionists.
Some Sunni leaders in Bahrain fear the fate of Iraq's Sunnis, sidelined after Shi'ites gained power through elections.
Unrest in the Saudi Eastern Province has flared again in recent months.
"The Saudis really don't need unrest in the Eastern Province right now," said Michael Stephens, researcher at the Doha-based Royal United Services Institute. "The policy priority for Saudi Arabia has been Syria for last three months."
Writing by Andrew Hammond