Pro-reform protests erupted in Libya Wednesday, part of growing demands for change in the Arab world that have brought pressure to bear on even the longest ruling regimes.

Libyan leader Moammar Gadhafi, who has ruled his country virtually unchallenged for more than 41 years, saw crowds of protesters in the streets – unprecedented since he seized power in a 1969 coup.

Early Wednesday hundreds of Libyans calling for the Gadhafi government's ouster clashed with security forces firing rubber bullets and water cannons in the country's second-largest city as Egypt-inspired unrest continued to spread.

State television broadcast only government-sanctioned protests, but videos posted on YouTube showed thousands of Libyans in the street demanding an end to Gadhafi's rule.

The protest in Benghazi was triggered by the arrest Tuesday of a Libyan activist but quickly took on an anti-government tone, witnesses and activists said. The protest was relatively small in size, but are so rare in Libya it signalled anti-government activists have been emboldened by the recent wave of uprisings in neighbouring countries.

Another rally is planned for Thursday and activists using Facebook and Twitter have called for nationwide demonstrations calling for Gadhafi's resignation, a new constitution and comprehensive political and economic reforms.

As a concession to the demonstrators, Libya's government freed 110 alleged Islamic militants Wednesday, members of a group plotting to overthrow Gadhafi, leaving only 30 members of the Libyan Islamic Fighting Group in prison.

Seif al-Islam Gadhafi, son of the group's leader demanded the release of the prisoners as part of a reconciliation plan. The Libyan Islamic Fighting Group is suspected of having links to al Qaeda.

The government also proposed increasing the salaries of state workers by 100 per cent.

In the U.S.- allied Persian Gulf state of Bahrain, protesters called for the end of a ruling dynasty that has led the country for more than 200 years.

Two people died after police used tear gas and rubber bullets on one crowd of protesters, but thousands remained entrenched in the Bahrain capital's landmark central square, which they have occupied for three days, demanding sweeping political reforms.

Thousands of people spent the night in a makeshift tent camp in Manama's Pearl Square and security forces pulled back after the clash that left two people dead and dozens injured.

Increasingly, protesters also chanted slogans to wipe away the entire ruling dynasty that has led Bahrain for more than 200 years.

State TV also showed hundreds of pro-government demonstrators marching through the streets of Manama.

Also on Wednesday, Bahrain's King Hamad bin Isa Al Khalifa held talks with high-ranking officers of the Bahrain Defence Force about the ongoing unrest.

On Tuesday, Al Khalifa made a rare nationwide TV address to offer condolences for the deaths of the anti-government protesters, pledge an investigation into the killings and promise to push ahead with reforms that include loosening state controls on the media and Internet.

The protests began on Monday as a cry for the country's Sunni monarchy to loosen its grip, including hand-picking most top government posts, and open more opportunities for the country's majority Shiites, who have long complained of being blocked from decision-making roles.

But the uprising's demands have steadily reached further.

Many protesters are calling for the government to provide more jobs and better housing and free all political detainees, and increasingly, protesters are also chanting slogans to wipe away the entire ruling dynasty that has led Bahrain for more than 200 years.

Social networking websites were abuzz with calls to press ahead with the protests as well as insults from presumed government backers calling the demonstrators traitors and agents of Shiite powerhouse Iran.

The head of the largest Shiite political bloc, Sheik Ali Salman, said there were no demands for an Islamic role in politics.

The group, Al Wefaq, has 18 seats in the 40-member parliament, but it is boycotting the chamber to protest against the violence against demonstrators.

Bahrain is a linchpin to the US military framework in the Gulf.

Clashes in Yemen

In Yemen, meanwhile, authorities have flooded the streets of the country's capital with 2,000 police to try to put down days of Egypt-style demonstrations against the longtime president. One person was killed and five wounded when police and protesters clashed in the southern port of Aden.

Police in Aden used live ammunition, rubber bullets and tear gas against hundreds of demonstrators. A security officer said a 23-year-old protester was killed Wednesday when he was shot in the head,

A medical official said five others were wounded, at least one seriously. Police fired in the air and blocked thousands of students at Sanaa University from joining other protesters holding a sixth straight day of demonstrations in the Arab world's most impoverished nation.

In Iraq, a spokesperson for a southern province said around 2,000 people attacked government offices on Wednesday and tried to set fire to the governor's house to protest often shoddy public services.

The spokesperson said 13 people were injured in the protest in the city of Kut, 160 kilometres southeast of Baghdad.

Protesters threw stones at the provincial council headquarters, set a trailer outside on fire and rushed inside the building, according to the spokesperson.

They also went to the governor's headquarters and his house, trying to set it on fire.

Al-Dahabi said the governor was not at home.

Following the uprisings in Tunisia and Egypt, Iraqis have staged small-scale protests demanding better services, such as electricity.

In Egypt, where the new wave originated, the country's top Muslim cleric, the Grand Sheikh of Al-Azhar, Ahmad El-Tayyeb, said on Wednesday in Cairo that if there were free and transparent elections for the post of Grand Sheikh he would be happy to stand.

"After the Parliament and Shura council were disbanded we agreed to elect the Grand Sheikh of Al-Azhar. This is if a guarantee is given that the voting will be free, fair and transparent. If this is achieved I would also be happy to be appointed in my current position," al-Tayyeb told reporters at a news conference.

News reports quoting a source close to al-Tayyeb said he will also request that candidates should run for a fixed term in office, instead of staying in office for life.

The clerical post is the highest seat in the Sunni world.

Before 1961 the Grand Imam was elected by a group of grand scholars and imams, but since Egyptian President Gamal Abdul-Nasser's rule the appointment to the post has been done by the Egyptian President.

The call for elections to the clerical seat comes after the Egyptian constitution was suspended by military rulers following 18 days of democracy protests which toppled long time President Hosni Mubarak.

Egypt's top archaeologist Zahi Hawass said Wednesday that three of eight pieces reported missing from the famed Egyptian Museum have been found.

One was found under a case in the museum and two were found in the museum courtyard, the archaeologist said.

On 28 January, during massive street protests that led to the ouster of Mubarak, looters climbed a fire escape, broke windows on the roof and entered the museum by rope. They broke 13 cases, scattering about 70 objects on the ground. About 20 of those will be repaired.

The items found include a statue of a goddess who was carrying the 18th Dynasty King Tutankhamun.

The king's statue has not been found. Hawass said police had arrested a number of suspects.