By Reed Stevenson
MANAMA (Reuters) - Talks between Bahrain's opposition and pro-government groups began on Saturday, aimed at healing the deep rifts caused by protests earlier this year by majority Shi'ites that were stamped out by the Sunni rulers.
The opposition has expressed skepticism over whether the national dialogue, decreed by King Hamad bin Isa al-Khalifa, can accomplish anything, noting that it only has 35 of the 300 seats at the bargaining table.
"We start without conditions or limits, our only condition is accepting one another," said Khalifa bin Ahmed al-Dhahrani, chairman of the dialogue and also a speaker of parliament.
The Gulf Arab kingdom off the coast of Saudi Arabia is strategically important, perched atop vast underground oilfields. It also hosts the headquarters of the U.S. Navy's Fifth Fleet.
Inspired by uprisings in Tunisia and Egypt that toppled rulers in the two countries, Bahrain's majority Shi'ites took to the streets in February and March to demand political reforms. Sunni rulers crushed the movement with martial law and help from security forces from Saudi Arabia and the United Arab Emirates.
An estimated 30 people died, hundreds were arrested and thousands lost their jobs.
Hardline Sunnis accused the mostly Shi'ite protesters of a sectarian agenda backed by non-Arab Shi'ite power Iran, across Gulf waters. Bahrain has historically been the nexus point for tensions between Gulf Sunni monarchies and Iran.
Hoping to defuse tensions, the king lifted martial law a month ago and called for a dialogue to discuss political, economic, social and legal reforms with "all options" on the table.
After lengthy internal debate, Wefaq, the leading Shi'ite opposition group, decided to join the dialogue but threatened to pull out if talks did not move toward greater representation in government. Bahrain has an elected assembly but the ruling Al Khalifa family appoints cabinet ministers and the upper house.
"The whole of Bahrain will be much better if we have an elected government," said Wefaq spokesman Khalil al-Marzouq. Wefaq has complained that it is under-represented and that there are too many people to reach any meaningful consensus.
Dhahrani told participants that any agreed proposals would be taken to the king, who "will pass it on to legal organizations for the necessary implementation."
The forum has received hundreds of proposals for discussion.
Discussions on Saturday were mostly ceremonial, with a recital from the Koran, a speech and presentations. By early afternoon, the main hall was empty and only one sub-group appeared to be in talks in a separate room.
Leading up to the start of the dialogue, the government offered some concessions, including the launch of an investigative panel led by law professor Cherif Bassiouni, an Egyptian-American war crimes expert who is also heading U.N. inquiry into events in Libya.
Most, though not all, Saudi troops are being withdrawn and there are fewer armored vehicles and tanks on the dusty streets of Manama, although checkpoints still dot the streets.
King Hamad, in a speech televised on the eve of the talks, said: "It will be a true dialogue in every respect and no section of Bahrain's wide and diverse society will be ignored."
Yet hours before the King's speech, more than 20,000 Shi'ites crowded the center of the town of Diraz at a Wefaq rally, demanding to be heard and waving Bahraini flags.
"No dialogue with al-Khalifa" and "Freedom for all prisoners," they shouted.
Just a week earlier, eight prominent Shi'ite opposition leaders were sentenced to life in prison, and small nightly protests erupt in Shi'ite villages, only to be snuffed out by police with tear gas.
Additional reporting by Erika Solomon in Dubai)