On Saturday protesters swarmed back into Pearl Roundabout and confidently set up camp for a protracted stay.
On orders from the crown prince, troops and armoured vehicles had withdrawn from the square, which they had taken over on Thursday after riot police staged a night-time attack on a sit-in by protesters.
'A process of dialogue has begun between the crown prince and political groups,' the information affairs authority said in a message on Twitter. It gave no further details of the contacts.
'All political parties in the country deserve a voice at the table,' Prince Salman spoke of the dialogue, adding the king had appointed him to lead it and to build trust with all sides.
'I think there is a lot of anger, a lot of sadness, and on that note I would like to extend my condolences to all of the families who lost loved ones and all of those who have been injured. We are terribly sorry and this is a terrible tragedy for our nation,' he said.
The crown prince said protesters would 'absolutely' be allowed to stay in the square.
The demands are likely will be put on Sunday to Crown Prince Salman, seen as a reformist, the opposition source said. The government said dialogue had already begun.
'The two main players are Sheikh Ali Salman and Ibrahim Sharif,' a source said. Sheikh Ali is the secretary general of Wefaq, whose members quit parliament over the crisis, while Sharif heads the secular Waad group that has not won seats in parliament.
On Saturday, the crown prince suggested the unrest was the result of a lack of action on demands. He said that there may be a feeling that some basic demands had not been met. 'We want to correct this situation and prevent its repetition.'
'The protesters in Pearl Roundabout represent a very significant proportion of our society and our political belief,' the Crown Prince said. 'But there are other forces at work here. This is not Egypt and this is not Tunisia. And what we don't want to do, like in Northern Ireland, is to descend into militia warfare or sectarianism,' he said in the interview, aired late on Saturday.
Meanwhile, Saudi Arabia called on Bahrainis 'to act with reason ... and accept the proposals of the government of Bahrain ... which is keen to protect stability and security', an official statement carried by Saudi, state media said.
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