Thousands of anti-government protesters in Bahrain have entered Pearl Square, the focal point of protests in the capital Manama.
Jubilant protesters returned after riot police fired tear gas and shotgun rounds before leaving. Reports say some 60 people may have been injured.
The army, which guarded the square after using deadly force to clear it on Thursday, was earlier ordered out.
Bahrain's crown prince is holding initial talks with opposition parties.
They include the main Shia opposition parties in the Sunni-ruled Gulf state, our correspondent Caroline Hawley reports from Manama.
Earlier, reports said that the main Shia opposition bloc, Wefaq, had rejected an offer from the king to hold talks aimed at ending days of unrest.
Protesters had demanded the withdrawal of the military from the streets before talks could begin.
However, in a statement made on Bahraini TV on Saturday Crown Prince Salman bin Hamad al-Khalifa said "calm is needed at this time... for all parties to be able to present their opinions".
Reports suggested the crown prince - who controls the armed forces - ordered the army off the streets.
Day of mourning
Following the army's withdrawal on Saturday, heavily armed riot police fired volleys of tear gas and shotgun rounds as anti-government protesters arrived at the square from all directions.
As the protesters stood firm police then pulled out, leaving the square to the jubilant crowd. They waved flags and carried banners into the square in a show of defiance to the authorities.
The crowds now appear determined to stay in the square, setting up a makeshift hospital and erecting tents.
"We don't fear death any more, let the army come and kill us to show the world what kind of savages they are," one woman, teacher Umm Mohammed, told the Reuters news agency.
The protesters have made the square, a large traffic roundabout, a focal point of demonstrations in recent days.
They have been increasingly angry at the violent suppression of their protests by the security forces.
At least 50 people were wounded on Friday as the army fired on protesters following the funerals for four killed when troops cleared Pearl Square early on Thursday.
Two people were also killed earlier in the week.
Bahrain's Crown Prince, Salman bin Hamad al-Khalifa, has called for calm in an effort to hold a national day of mourning for those who have died.
Bahrain is one of several Arab countries to have experienced pro-democracy demonstrations since the fall of long-time Tunisian President Zine El Abidine Ben Ali in January. Egypt's Hosni Mubarak was forced from power on 11 February.
The majority Shia population in Bahrain have long said they are discriminated against when it comes to housing and government jobs. They have also been calling for greater political rights from the Sunni royal family.
Earlier, the main Shia opposition bloc, Wefaq, rejected an offer from the king to hold talks aimed at ending the unrest.
Correspondents say leaving the square to the protesters may be a response to US President Barack Obama's call for restraint.