Bahrain's Arab spring chapter is still being written two years on

Anniversaries of the Arab spring uprisings of 2011 are falling thick and fast, though nowhere is it harder to draw up a balance sheet than in Bahrain, where the immediate challenge to the government was seen off two years ago but opposition persists – with little prospect of a resolution any time soon.

Smouldering unrest has flared up in advance of Thursday's commemoration of the Pearl Roundabout protests. These lasted for a month before pro-democracy demonstrators were driven out and Saudi Arabia led a Gulf intervention force to shore up the status quo while the US and Britain looked the other way.

Now smoke from petrol bombs and burning tyres again fills the air while police fire tear gas and stun grenades to restore order. The government, which has a slick PR machine, simply blames "thugs" for the violence. The explosion of a small bomb in a shopping centre in Issa Town on Tuesday was an unwelcome novelty.

Uniquely in the region, Bahrain has a Sunni monarchy which rules over a restive Shia majority. Sectarian tensions are fuelled by the confrontation between Iran and its Gulf Arab neighbours - and by Bahrain's strategic importance as headquarters of the US navy's Fifth Fleet. Manama often accuses Tehran of encouraging unrest - though there is no evidence of direct involvement beyond shrill Arabic-language propaganda.

Pearl Roundabout has been physically erased – the lesson of Cairo's Tahrir Square is not to allow opposition forces permanently to occupy a public space – but political deadlock has persisted. The much-heralded resumption of a national dialogue this week does not appear to hold out the prospect of fundamental change.

The mainstream opposition al-Wefaq is taking part in the talks. It wants a constitutional monarchy with an elected prime minister to replace King Hamad's uncle – in the job for an extraordinary 42 years. Equally threatening for the Al Khalifa dynasty, it is demanding a redrawing of gerrymandered constituency boundaries and equal access to government jobs for Shias, who face discrimination that sometimes borders on apartheid. State media has whipped up anti-Shia prejudice.

Wefaq also insists that the results of the dialogue be put to a referendum rather than be submitted to the king for approval – a crucial difference. Under pressure from the west Hamad did appoint a commission of enquiry into the 2011 events but he has yet to implement key recommendations.

Sheikh Ali Salman, Wefaq's leader, fears the government is trying to buy time. "Everyone is convinced that mistakes were made during the uprising," he told me in a recent interview. "Even the hardliners want to find another way. But they are only prepared to make cosmetic changes."

Salman acknowledges that he faces pressure from more radical elements like the February 14 Youth coalition and al-Haq, which calls for the overthrow of the regime. That worries the neighbouring sheikhs, emirs and kings who were so unnerved by the revolutions in Egypt, Tunisia and Libya. The Saudis in particular fret about unrest among the Shia minority in their Eastern province. But even they, Salman argues, now want a solution as long as the monarchy is preserved.

Signs are too that hardliners are calling the shots in the Al Khalifa camp, with the position of the reformist crown prince eclipsed and economic development and foreign investment suffering.

Bahrain's western supporters could do more to promote reform. Bahrainis say discreet UK efforts have helped restrain the government but more public pressure is necessary. Recently there have been calls to rethink policy in Washington. "The US Navy should prepare plans for the gradual relocation of the Fifth Fleet's assets and functions away from Bahrain to potentially use as leverage to shift regime behaviour," suggested the Carnegie Foundation.

On one view the intention in Manama is not to reach a genuine accommodation with the opposition but to defuse tensions to allow the prestigious Formula One Grand Prix race to be held undisturbed in April. It had to be cancelled in 2011 but went ahead to the accompaniment of damaging headline-grabbing protests last year. It is hard to imagine that Bahrain will be experiencing racing or indeed other business as usual any time soon.