Ruled for more than two centuries by the same family, Bahrain is facing a growing movement for political reform that also has rocked its Arab neighbors.
King Sheikh Hamad bin Isa Al Khalifa, who rules Bahrain, spearheaded a campaign to change the country from an emirate to a constitutional monarchy. A new constitution - enacted February 14, 2002 - established an elected parliament.
The move initially helped to calm tensions between the country's majority Shi'ite population and the ruling Sunni political elite.
But Shi'ite activists have been disappointed with the new system and the limited authority granted to the elected lower house of parliament, prompting calls for a new constitution.
The country has a relatively free press. But rights group Amnesty International said authorities have been closing websites critical of the government and banning opposition newspapers following anti-government protests last year.
As the first Gulf state to discover oil, Bahrain built its economy from oil refining and export. With dwindling reserves that are expected to run out in 10 to 15 years, however, the country has diversified to also become a major center for Islamic banking.
More than half of the 1.2 million people living in Bahrain are expatriates.
In light of high unemployment rates among Bahraini young people, the government has taken measures to make it more difficult to hire foreign workers.
Bahrain is a close ally of the United States, home to the U.S. Navy's Fifth Fleet, and has cooperated with the U.S. in combat operations in the Gulf.
Some information for this report was provided by Reuters.