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Bahrain TV said the king "authorised the commander of Bahrain's defence forces to take all necessary measures to protect the safety of the country and its citizens".
Bahrain declared martial law on Tuesday, a day after Saudi Arabian forces arrived in the Sunni-ruled kingdom to help restore calm following weeks of protests by the island's Shi'ite Muslim majority.
Bahrain TV said the king "authorised the commander of Bahrain's defence forces to take all necessary measures to protect the safety of the country and its citizens".
The royal order was due to come into force on Tuesday and would apply to all parts of the Gulf state, a regional oil and banking hub, with the country's security forces taking charge for the next three months, the television channel said.
It was not clear if a curfew would be imposed or there would be any clampdown on the media or public gatherings.
On Monday, more than 1,000 Saudi Arabian troops rolled into the kingdom in a long convoy of armoured vehicles at the request of Bahrain's Sunni rulers, flashing victory signs as they crossed the causeway connecting Saudi Arabia to the small island.
The United Arab Emirates said it also would send 500 police.
Analysts saw the troop movement into Bahrain, home to the US Navy's fifth fleet, as a mark of concern in Saudi Arabia that concessions by the country's monarchy could inspire the conservative Sunni-ruled kingdom's own Shi'ite minority.
Bahrain has been gripped by its worst unrest since the 1990s after protesters took to the streets last month, inspired by uprisings that toppled the leaders of Egypt and Tunisia.
Unlike those countries, where the mainly Sunni populations united against the regime, Bahrain is split along sectarian lines, raising the risk of a slide into civil conflict.
Sectarian clashes broke out in different parts of Bahrain overnight, with Sunnis and Shi'as trading accusations in the media that they had been attacked by gangs of youths.
Violent clashes between youths wielding clubs, knives and rocks have become daily occurrences, forcing Bahrain University and many schools to close to avoid further trouble.
In a sign that Bahrain is heading for prolonged unrest, demonstrators camping at Pearl roundabout, the focal point of weeks of unrest, remained defiant on the Saudi Arabian intervention.
"We reject this intervention and we consider it occupation. Any foreign intervention to crush the people is occupation," said Akeel Jaber, an activist at the roundabout.
Over 60% of Bahrainis are Shi'as who complain of discrimination at the hands of the Sunni royal family. Calls for the overthrow of the monarchy have alarmed the Sunni minority, which fears that unrest could serve non-Arab Shi'a power Iran.
Iran, which sits across the Gulf from Bahrain, sharply criticised the Saudi intervention.
"The presence of foreign forces and interference in Bahrain's internal affairs is unacceptable and will further complicate the issue," foreign ministry spokesperson Ramin Mehmanparast said at his weekly news conference in Tehran.
The United States has urged Saudi Arabia, the world's top oil exporter and a key US ally in the Gulf Arab region, to show restraint, though analysts said the escalation showed the limits of US influence when internal security was threatened.
In a sign that security in Bahrain could deteriorate, the US state department advised against all travel to the island due to a "breakdown in law and order".
With reports from Robin Pomeroy in Iran, Firouz Sedarat in Dubai