Helicopters hovered overhead as hundreds of police and military units fired tear gas shells and charged thousands of protesters camping in the area for weeks killing two people as they overran the Square, BBC reported.
Multiple explosions were heard and smoke was seen billowing over Central Manama, hospital sources said two people were bought dead.
Gulf News quoting Bahrain police said the dead were two policemen. Police pounced on the protesters from all sides forcing them to flee.
The crackdown came two days after hundreds of Saudi led foreign forces entered Bahrain as part of Gulf Cooperation Council (GCC) initiative to protect government facilities. It was not immediately clear whether today's security clampdown involved Saudi troops.
An opposition lawmaker Ali Al Aswad told Al Jazerra that government were using Apache Helicopter gunships to shot on people.
An official statement read out on television said that the king had authorised the commander of Bahrain's defence forces to take all necessary measures to protect the safety of the country and its citizens.
Gulf News said that UAE had also send about 500 police personnel to Bahrain and quoted the Foreign Minister Abdulla bin Zayed Al-Nahyan saying he did not rule out the possibility of its troops also going to Bahrain.
The tiny Gulf Kingdom, which is home to US 5th Fleet has a dominant Shia majority and has been sweeped by protests over the last several weeks. The protesters allege discrimination and lack of rights and are seeking political reforms including restricting the country's monarchy to a constitutional role only.
The authorities have closed all educational institutions and the country's stock exchange suspended trading business. Bahrain's protest are viewed as extension of the regions between the Gulf Arab leaders and Shia powerhouse Iran.
The unrest has sparked unease in the Saudi Arabia and has put the US in difficult position of having to standby a regional ally while also backing democratic change.