Manama, Bahrain (CNN) -- Thousands of joyous Bahrainis retook a major square in the heart of the island nation's capital Saturday -- a dramatic turn of events two days after security forces ousted demonstrators from the spot in a deadly attack.

The sight of citizens streaming into Pearl Roundabout came as the Bahrain royal family made moves designed to end a turbulent week of unrest capped by calls from world leaders to talk with opposition leaders with an eye to reform.

Crown Prince Salman ordered the removal of the military from the Pearl Roundabout, a top demand by opposition forces, and told CNN's Nic Robertson that citizens would be permitted to stay in the spot without fear.

"We have, under the leadership of his majesty, decided that the best way to handle the situation without any further loss of life or injuries is through dialogue," he said.

The crown prince said he was deeply sorry for the deaths of protesters. An investigation will be launched and those responsible will be held accountable, he said.

"This is a terrible tragedy for our nation," he said.

Salman also said the government will be embracing talks with all parties, a sign that the government is stepping back from confrontation and embracing dialogue.

"All political parties in the country deserve a voice at the table," he said.

Bahrain's military withdrew from the square after issuing a statement saying it "successfully completed" its mission of "safeguarding vital areas in the center of the capital." Police were placed in charge but withdrew from the roundabout on the heels of the military.

Thousands of people streamed into the roundabout, the focal point of protests in central Manama, waving flags, praying, dancing and honking horns.

"I'm feeling freedom," one protester said moments after soldiers and police retreated. "It's the beginning, the beginning of our freedom."

While there was anger in the crowd over longstanding grievances, it was a sharp contrast to deadly confrontations early Thursday and Friday evening.

Many of the protesters are Shiite Muslims, who make up 70 percent of the residents of the island kingdom and have long harbored deep political and economic grievances against the Sunni ruling family.

Bahrain is one of several countries in the Middle East and North Africa to face a surge of dissent following the revolts that toppled longtime autocrats in Tunisia and Egypt.

This week's ferment upended the kingdom, a tiny but strategically critical country that's a key U.S. ally and home to the U.S. Navy's Fifith Fleet, and left 10 dead and many injured.

Two protesters were killed early this week. Four people died after security forces stormed the Pearl Roundabout early Thursday, ousting an encampment of sleeping demonstrators and taking control of the location.

Four others died on Friday evening after demonstrators attempted to approach the square and the security forces fired bullets and tear gas at them.

World leaders have urged the Bahrain government to open talks with protest leaders.

As international condemnation rolled in over the military's use of force against peaceful demonstrators, the royal family urged a dialogue with all sectors of the society to resolve the situation.

In a nationally televised address Friday, Salman offered his condolences, cautioned citizens and security forces to restrain themselves, and said the country wants a nation where neither Sunni or Shiites are favored.

After Salman's TV appearance, King Hamad announced that the crown prince is to lead a dialogue "with all parties and sections of Bahrain, without exception."

But a leading member of parliament from Bahrain's main Shiite opposition party, al-Wifaq, told CNN that there can be no dialogue with the government while the military controls the streets.

The crown prince ordered the military Saturday to withdraw from Bahrain's streets and left the police in charge to "oversee law and order." He appealed for calm and said "the situation is going back to normal."

"We are starting a new stage, a stage that we will discuss all our issues with all honesty and integrity," he said.

"To all the citizens of Bahrain, I hope that we be shoulder to shoulder, collaborate with each other, and communicate with all the political forces."

CNN's Nic Robertson and Tim Lister in Bahrain contributed to this report.