"Five deaths have been registered among the outlaws" in Diraz, near the capital of Manama, where the police opened fire to disperse the sit-in outside the home of cleric Isa Qassim, the ministry said in a Twitter message yesterday.
Witnesses had earlier told AFP that several civilians were wounded when police officers fired at demonstrators throwing stones and Molotov cocktails at security forces.
"Several terrorists and convicted felons were also apprehended with a large number of them hiding in the residence of Isa Qassim," it added.
Qassim is considered the spiritual leader of Bahrain's majority Shiite community.
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The kingdom has been rocked by unrest since 2011, when local authorities backed by a Saudi military force crushed Shiite-led protests demanding a constitutional monarchy and an elected prime minister.
Earlier yesterday, the Britain-based Bahrain Institute for Rights and Democracy (BIRD) had announced one death as the police moved to disperse the long-running protest.
The police operation came just days after President Donald Trump met with Bahrain's King Hamad in Saudi Arabia at the weekend, where the US leader made a clear break from previous US policy.
Trump told the king on Sunday it was "a great honour to be with you" and said there "has been a little strain but there won't be strain with this administration".
The Bahrain authorities have accused Qassim, sentenced Sunday to a suspended one-year jail term for illegal fundraising and money laundering, of serving "foreign interests" and promoting "sectarianism and violence".
Bahraini authorities have also accused Iran of fomenting unrest in the kingdom, ruled for more than two centuries by the Sunni Al-Khalifa dynasty. Tehran has denied any involvement.
The government's clampdown on dissent has drawn harsh condemnation from international rights groups and governments.