By Lin Noueihed and Rania El Gamal
MANAMA (Reuters) - Bahrain's main opposition groups eased conditions for talks to end a crisis that has drawn in neighboring armies, though tensions in the oil-exporting region remained high as Bahrain expelled an Iranian diplomat.
Led by the largest Shi'ite party Wefaq, opposition groups called late on Saturday on security forces to free all those detained in the wake of a month of protests, end their crackdown and ask Gulf Arab troops to leave so talks could begin.
"We will not back down under threat and we will not come to talks with guns pointed at our heads," said Mattar Ibrahim Mattar, a Wefaq MP until the bloc withdrew from parliament a few weeks ago.
But main opposition groups appeared to retreat from much more ambitious conditions they set last week for talks, including creation of a government not dominated by royals and establishment of an elected council to redraft the constitution.
"Prepare a healthy atmosphere for the start of political dialogue between the opposition and the government on a basis that can put our country on the track to real democracy and away from the abyss," their statement said.
The new conditions would take the political process back to the position it was in before the uprising began a month ago.
Bahrain forces moved on Wednesday to end weeks of mostly Shi'ite protests that prompted the king to impose martial law and drew in troops from fellow Sunni-ruled neighbors.
The ferocity of the crackdown, in which troops and police fanned out across Bahrain, imposed a curfew and banned all public gatherings and marches, has stunned Bahrain's majority Shi'ites and angered the region's non-Arab Shi'ite power, Iran.
More than 60 percent of Bahrainis are Shi'ites, and most are campaigning for a constitutional monarchy, but calls by hardliners for the overthrow of the monarchy have alarmed Sunnis, who fear the unrest serves Iran, separated from Saudi Arabia and Bahrain by only a short stretch of Gulf waters.
TENSIONS WITH IRAN
Iran, which supports Shi'ite groups in Iraq and Lebanon, has complained to the United Nations and asked neighbors to join it in urging Saudi Arabia to withdraw forces from Bahrain.
In a sign of rising tensions between the two countries, Bahrain expelled Iran's charge d'affairs on Sunday, a diplomatic source told Reuters on Sunday. He left shortly after the Iranian ambassador, who was asked to leave last week.
"Bahraini authorities said he had contacts with some (opposition) groups," the source said.
Bahrain also complained to Arabsat on Sunday over "abuse and incitement" on Iran's Arabic-language Al Alam television, Hezbollah's Al-Manar and Shi'ite channel Ahlulbayt, which are all carried by the broadcaster, state news agency BNA said.
Bahrain also condemned a protest outside the Saudi consulate in Tehran, after reports on Saturday that some 700 demonstrators broke windows and raised a Bahraini flag over the gate.
Sunday was the first working day after a week that saw closures of schools and universities to prevent outbreaks of sectarian clashes that had been erupting almost daily.
An uneasy calm spread through the city as most Bahrainis went back to work and there were fewer checkpoints in the streets, though helicopters buzzed over Shi'ite areas.
Over 2,000 mourners in the Shi'ite village of Sitra, pumping their fists and shouting "Down with the regime" joined the third funeral procession in as many days on Sunday. Issa Radhi, 47, was one of four protesters killed in last week's crackdown.
He went missing after a protest in Sitra on Wednesday and police called his family on Saturday to say they found his body. His brother said he was badly beaten, with birdshot in his legs.
"We bury him today but we won't bury the right to avenge his death," his brother Khalil Radhi said.
Hours after Radhi's funeral, Wefaq said a man taken away by security forces two days ago was dead. It said police had told Abdulrusul Hajair's family to collect his body from hospital.
A former Wefaq parliamentarian said some 100 people had gone missing in the crackdown, speaking at a small 15-minute protest in front of the United Nations building in Manama.
"We don't know anything about them, we've asked hospital and ministry authorities and none of them are telling us anything about them," Hady al-Mussawy said, one of around 21 former Wefaq MPs carrying Bahraini flags and calling on the UN to help ensure rescue medical services were working in Bahrain.
Bahrain's military tried to bring life back to normal, shortening the 12-hour curfew that had been imposed on large areas of Manama to an 8 p.m. to 4 a.m ban. They urged public sector workers and schools and universities to return to work.
But mourners in Sitra, many claiming they were on strike, struck a tone of defiance.
"Of course we will continue (protesting)," said Ahmed Hussein, 25, Ridhi's nephew, "Either victory or martyrdom."
(Additional reporting by Erika Solomon in Manama and Firouz Sedarat in Dubai; editing by Andrew Roche)