MANAMA (Reuters) - Bahrain's largest Shi'ite opposition group Wefaq has accepted Kuwait as a mediator with Bahrain's government to end a political crisis gripping the tiny kingdom, a member of Wefaq said on Sunday.
Bahrain imposed martial law and called in troops from neighboring Sunni-ruled states earlier this month to quell weeks of unrest by mostly Shi'ite protesters.
Jasim Husain, a member of Wefaq, said Kuwait's Emir Sheikh Sabah al-Ahmad al-Sabah had offered to mediate between Bahrain's Sunni al-Khalifa ruling family and Shi'ite opposition groups.
"We welcome the idea of bringing in an outside element," Husain told Reuters.
Husain said talks had to address issues outlined by Bahrain's Crown Prince Sheikh Salman bin Hamad al-Khalifa before Gulf state troops entered Bahrain. These include an elected government and reform of electoral districts that the opposition says were drawn to ensure a Sunni majority in parliament.
"The fear is that the results (of mediation) may not be acceptable to the opposition or that they can't be sold to the public," said Husain.
Wefaq and its six allies said last week they would not enter talks unless the government pulled troops off the streets and freed prisoners.
Observers said Wefaq had now dropped these demands.
"This is the most significant political development in the efforts aimed at reaching a peaceful solution," said Mansoor al-Jamri, editor of the opposition Al-Wasat newspaper.
Sunni-led Saudi Arabia and the United Arab Emirates, which view Bahrain's ruling family as a bulwark against regional Shi'ite power Iran, have sent troops to Bahrain to help it quell weeks of pro-democracy protests.
Kuwait, which has a Shi'ite minority of its own, has sent navy vessels to Bahrain under a Gulf security pact to patrol its northern coastline.
The Gulf Cooperation Council -- a regional political and economic bloc made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- welcomed the mediation move.
"We hope that this initiative will be in the interest of security and stability," Secretary-General Abdulrahman al-Attiyah told reporters in Kuwait.
Wefaq and its allies want an elected council to redraft the constitution, a demand over which preliminary talks with Khalifa collapsed shortly before Gulf troops arrived and Bahrain drove protesters off the streets and banned public gatherings.
More than 60 percent of Bahrainis are Shi'ites, and most are campaigning for a constitutional monarchy, but calls by hardliners for the overthrow of the monarchy have alarmed Sunnis, who fear the unrest serves Iran, separated from Bahrain by just a short stretch of Gulf waters.
Seven civilians and four police died in the crackdown. The ferocity of the government response to the unrest stunned Bahrain's majority Shi'ites and angered Iran.
A Wefaq delegation is set to meet Kuwaiti politicians including Parliament Speaker Jassem al-Kharafi, Kuwaiti daily al-Seyassah said on Sunday, citing unnamed political sources.
Ali al-Matrook, a Kuwaiti Shi'ite businessman, is one of the mediators, Wefaq's Husain said.
Bahrain cut curfew times again, by an hour, on Sunday. From Seef Mall through the financial district to the diplomatic area the curfew now runs from 11 p.m. (0200 GMT) to 4 a.m. (0700 GMT), cut gradually from 12 hours when it was first imposed.
(Additional reporting by Rania El Gamal in Manama, and Eman Goma and Mahmoud Harbi in Kuwait; Editing by Andrew Roche)