Country Profile: Bahrain

— -- In Arabic, the word "Bahrain" translates as "two seas," a literal description of the strategic significance of this tiny archipelago nation comprised of about 30 small islands.

Located in the heart of the Persian Gulf, with Saudi Arabia to its east and Iran directly across the Gulf, Bahrain has historically displayed an expedient foreign policy with its Arab neighbors and the West.

An ancient shipping junction linking the Sumerian and Indus Valley civilizations, Bahrain has been headed since 1783 by the Al Khalifah family, a noble family of a Sunni Muslim tribe with close ties to Britain.

From 1861, when the ruling family signed a binding treaty of protection with the British, until its independence in 1971, Bahrain was virtually a British protectorate.

The current Emir, the Cambridge educated Sheikh Hamad Bin-Isa Al-Khalifah has been in power since the death of his father, Sheikh Isa, in March 1999. Although his subjects are primarily Shiite Muslims, Sheikh Khalifah is a popular monarch who has promised to restore a democratically-elected parliament after a break of more than 25 years.

Close Ties With Britain and United States

Bahrain continues to have close diplomatic ties with Britain but since World War II, the United States has been playing an ever-increasing role in the country's foreign policy.

U.S.-Bahraini relations were cemented in the late 1970s, when the United States made Bahrain the base of its Middle East military presence. Today, Bahrain is host to the U.S. Navy's Fifth Fleet.

Although it was one of the first Gulf nations to discover oil, Bahrain's oil production levels are much below that of neighboring Saudi Arabia and Kuwait and the Emir has succeeded in transforming his tiny kingdom into an important international banking center.