1000 Saudi troops, alongside troops from the UAE, have entered Bahrain at the behest of the King. (Saudi and Bahrain are connected by a long causeway) They are also acting on behalf of the GCC (Gulf Cooperative between the Arab countries of the Gulf).
This is potentially huge.
Remember: Bahrain is about 85% Shiite, while the Royal family and their cronies are Sunni --this imbalance has sparked the tension there that's been boiling over. Adding a greater complication: Saudi Arabia and the other Arab Gulf states are also predominantly Sunni. Saudi has the added concern of their Eastern regions which not only hold significant numbers of Shiites but most of their oil.
The potentially catastrophic problem is if the big Shiite nation, Iran, decides to take action. Iran and Saudi have been seeing some proxy fights elsewhere: both have funded sides in Iraq (where Iran has been more successful in influencing politics), Iran-backed Hezbollah has ousted the Saudi-backed regime in Lebanon, and Saudi's secular partner in the region, Egypt under Mubarak, is now out of the picture for the time being. If Iran opts to send troops to support the opposition parties, we have a grade-A international emergency because it will disrupt all the oil going through the Gulf --and a proxy fight between Iran and Saudi could create far-reaching chaos in world markets that would cause a major, major worldwide recession as oil prices would skyrocket. Also keep in mind the Bahrain has a major US Naval Base, though it would seem likely that any such escalation would see all sides avoiding the base.
There is speculation that Iran would not be willing to do something that drastic. At the same time, Iran hadn't seen a need to intervene in Bahrain before because the momentum of events seemed to be naturally favoring the Shiite population. Things are different now that the Sunni Royal family has called in the support of neighboring armies --a potential "occupying force" which history demonstrates is never popular among a population.
Interestingly, because of the US base, Bahrain is the one country where the US has taken a strong stand in favor of the ruling gov't.
Keep an eye on this one --if it escalates you will probably be telling your kids about what started the subsequent events.
