In general, Bahrain maintains friendly relations with its neighbors. In the 1980s and 1990s, however, relations with Iran had been problematic. For much of the twentieth century, Iran claimed sovereignty over Bahrain. This claim was based on Iran's former control over the islands in the seventeenth and eighteenth centuries. In 1970, the government of Iran announced that it had no objection to Bahrain's gaining independence from the United Kingdom, but it did not renounce its earlier claims. After the Iranian revolution of 1979, prominent elements within Iran again called for Iranian control of Bahrain. However, in April 1980, Teheran officially renounced all claims to Bahrain. Although for the time being this issue is moot, it has nevertheless complicated relations between the two governments.
Of more immediate concern in the late 1980s and early 1990s were allegations that Iran was providing support for fundamentalist Islamic groups in Bahrain. After the Islamic Revolution, some Iranians called on Bahrain's Shi'a community to rise up against the al-Khalifas. Radical elements within Bahrain's underprivileged Shi'a community seemed to have been receptive to these suggestions. In December 1981, 60 Bahraini Shi'as were charged with plotting to assassinate key officials and members of the royal family. The government of Bahrain alleged that the group was supported by Iran. Another plot to overthrow the government was discovered in 1985. In December 1988, Iran was implicated in an alleged plot to sabotage Bahrain's oil refinery. Relations with Iran have improved and, since 1990, a Bahraini ambassador has been in Teheran. In 1992, a protocol for industrial and commercial cooperation was signed. In August 1999, then-Sheikh Hamad responded positively to an invitation to visit Iran by that country's president, Mohammad Khatami, with the hope that the two leaders could find ways to bring moderation to the fundamentalists' actions.
Bahrain has also had problems historically with its Arab neighbor and fellow Gulf Cooperation Council (GCC) member, Qatar. Both countries claimed sovereignty over three regions: the island of Hawar (which the International Court of Justice awarded to Bahrain in 2001); the Fasht al-Dibl coral reef; and the Zubara region. In 1996, Bahrain had rejected an offer by Qatar to build a causeway connecting Qatar to Bahrain.
In its relations with other countries Bahrain generally follows the lead of Saudi Arabia. Like Saudi Arabia, Bahrain's foreign policy is pro-Western and generally favorable to the United States. Bahrain supported the allies in the 1990–1991 Gulf War. Bahrain is home to the largest U.S. naval base in the region; as of mid-2002, the base was slated for significant expansion. King Hamad is expected to continue Bahrain's close ties with the United States; however, the challenge of balancing a pro-United States stand while retaining the identity of an Arab nation complicate the relationship.
Just prior to his death in 1999 Sheikh Isa's government protested U.S. and British air strikes against Iraq provoked by Saddam Hussein's refusal to cooperate with United Nations (UN) weapons monitors and UNSCOM (UN Special Commission) demilitarization measures. Another major problem in Bahrain's relations with the United States is American policy pertaining to the Arab-Israeli conflict. Like many other Arab countries, Bahrain does not recognize Israel and has often been critical of U.S. support for Israel. General unhappiness among the Arab nations about the 1997 decision to construct new Jewish settlements in disputed territory in Israel further chilled relations between Bahrain and Israel.
Despite the tension created by the situation in the Middle East, King Hamad supported the U.S.-led war on international terrorism. Hamad met with U.S. president George W. Bush at the White House in October 2001; during the meeting Hamad pledged unreserved support for the United States in the aftermath of the terrorist attacks on New York and Washington on 11 September 2001 and Bush designated Bahrain a "major non-NATO ally." (NATO is the acronym for North Atlantic Treaty Organization.) Bahrain, Egypt, and Jordan are the only Arab states to achieve this special diplomatic status, which establishes conditions for increased economic cooperation and expanded U.S. investment.
The rapid changes King Hamad is fostering in his country are dramatic in a region where change often takes centuries.
Towards the end of 2002, the U.S. military, with the support of the governments of Bahrain and Qatar, began to increase its presence in those two countries.