Police arrived early morning in tanks, troop transport vehicles and buses. Smoke was seen rising over the square after several of the protesters’ tents were set on fire, possibly by exploding cooking gas canisters.
After demonstrators left through side streets, police tore down the remaining tents and took up positions around the square.
The deputy head of the al-Wefaq movement, MP Khalil Marzouk, confirmed told the APF news agency that at least two protesters were killed by police.
The Interior Ministry said in a statement that two police officers were killed when the vehicles they were on were overturned.
Troops entered the financial centre to clear out roadblocks and the few protesters left after clashes there on Sunday.
The country’s stock market announced that it would remain closed on Wednesday, after King Hamad declared a three-month state of emergency to put down the protests.
The mostly Shia-Muslim protesters are demanding democratic reform from the Sunni dynasty that has ruled Bahrain for more than 200 years.