Gulf Arab countries  will continue discussions on a possible union of six nations but any such plan will take time, Saudi Arabia's Foreign Minister Prince Saud al-Faisal said on Monday.
"Leaders of the Gulf Cooperation Council (GCC)  have approved the call for a commission to continue studying in order to present final results (to a coming summit)," he told a news conference after a summit meeting.
"The issue will take time...The aim is for all countries to join, not just two or three."
He also said no steps would be taken on a closer relationship between Saudi Arabia and Bahrain.
Earlier leading Bahraini and Saudi pro-democracy  activists had criticized any plans for a unity deal between the two countries.
Reports on Sunday had suggested the two countries would announce a deal that increased economic, military and security ties between them, with Saudi troops likely to be permanently positioned in Bahrain.
Saudi forces entered Bahrain last March to crush an ongoing uprising against the country's ruling Al-Khalifa family and have never officially left.
The Saudi ruling Al-Saud family have continued to back the Al-Khalifa dynasty in Bahrain, despite claiming to support pro-democracy movements in Syria.
Mohammed al-Qahtani, a board member at the Saudi Civil and Political Rights  Association, said the deal would have been demonstrative of Riyadh's staunch backing for their dictatorial ally in Bahrain.
"The Saudi regime will back the regime in Bahrain to the end and that's unfortunate – it will be at the expense of democracy and human rights in Bahrain," he said.
"The real issue is the survival of these family-based regimes. That's all it is – they will do whatever it takes to maintain the status quo but I think there time is running out," he added.
Ala'a Shehabi, a leading human rights activist and founder of Bahrain Watch, said condemned any deal but said it showed the weakness of the Bahraini regime  after more than a year of mass pro-democracy protests.
"The basic thing is that the idea behind the union is to consolidate power in fear of uprisings and the internal dissent. It is more of a sign of weakness than strength," she said.
"The aim is to legitimize the presence of Saudi troops , formalize direct channels of funding because of imminent economic crisis  (in Bahrain) and create a political alliance between the ruling families – to form a united front against possible challenges."
Shehabi added that she was hopeful that any unity deal would backfire as it would force closer links between the Bahraini and Saudi opposition groups.
"This is a way of preventing the prospect of any reform or democratic changes. It could backfire, it could strengthen the opposition in Bahrain and create a common enemy ."
Bahrain's economy has stalled since the protests, with leading assets such as state airline Gulf Air announcing huge deficits.
Speaking on Sunday ahead of a GCC meeting on Monday's, Bahraini  Minister of State for Information Affairs Samira Rajab announced the deal between the countries in a bid to secure Bahrain's economic future.
"Sovereignty will remain with each of the countries and they would remain as UN members but they would unite in decisions regarding foreign relations, security, military and economy," she said.
Iranian politicians also condemned the deal, with 190 of the country's 290 MPs signing a decree that warned "the crisis in Bahrain will be transferred to Saudi Arabia  and will push the region towards insecurity."
"Bahraini and Saudi rulers must understand that this unwise decision will only strengthen the Bahraini people's resolve against the forces of occupation," they said in a letter.
Rajab's comments led to activists taking to the social networking site Twitter  to criticize the plans using the hashtag #KSAoccupyBAH.
One activist wrote that Bahrainis had voted to be independent from Iran in 1970 and any deal would require another referendum.