Saudi Attack Seems Al-Qaeda-Like

Suspected Islamic militants wearing military-style uniforms sprayed gunfire inside two office compounds in the heart of the Saudi oil production region Saturday, killing at least 10 people - including an American - before taking dozens of hostages at a luxury expatriate resort.

Saudi security forces stormed the walled Oasis Residential Resorts complex and surrounded the attackers on the sixth floor of a high-rise building, a police officer told The Associated Press. Security officials said between 45 and 60 people were being held hostage, mostly Westerners including Americans and Italians.

Statements posted on Islamic Web sites claimed the attack in the name of the Al-Quds (Jerusalem) Brigade. One statement was signed the "al Qaeda in the Arab Peninsula." It said the attacks targeted U.S. companies and that a number of "crusaders" had been killed.

A Saudi security official, citing the method, had said the attack was "definitely inspired by al Qaeda."

Saudi Arabia's ambassador to the United States, Prince Bandar, called the attack "a cowardly and despicable act of murder."

"These terrorists have no respect for human life and no regard for the principles of Islam," he said in a written statement.

The attack was the second deadly assault this month against the Saudi oil industry and came amid oil prices driven to new highs partly by fears that the Saudi kingdom - the world's largest oil producer - is unable to protect itself from terrorists.

Osama bin Laden, blamed for past terror attacks in Saudi Arabia, has vowed to destabilize the oil industry and undermine the kingdom for its close ties to the United States.

CBS News Correspondent Tom Fenton points out that a breakdown in law and order in Saudi Arabia, and disruption of the flow of oil, could mean even deeper U.S. involvement in the region.

Middle East expert M.J. Gohel tells Fenton. "Anything that happens in Saudi Arabia affects the entire global economy; I cannot see the west sitting on the sidelines and allowing this country to fall into the hands of the radicals."

Fenton says a major break in Saudi oil production would be a serious blow to the world economy. Experts such as Leo Drollas, Chief Economist of the Center for Global Energy Studies, call it a nightmare scenario. "The oil price could easily go to $100 per barrel," he says, "with grave repercussions throughout the world: inflation, balance of trade, GDP falls and so on and so forth."

The attack came as Saudi Arabia, OPEC's most powerful member, is urging the group to boost oil production to try to reduce the high cost of crude.

Peter Gignoux, a London-based oil adviser for GDP Associates in New York, said news of the attacks might trigger a further rise in oil prices but noted that oil facilities were unaffected.

Michael Rothman, chief energy strategist at Merrill Lynch in New York, also said there might be "a limited psychological reaction" in oil markets but that the attack would not affect supply.

British and Filipino citizens were reportedly also among those killed in the shooting rampage, as well as Saudi guards and a 10-year-old Egyptian boy whose father works for an oil company. The kingdom's Crown Prince Abdullah said about 10 Saudis and foreigners were killed.

"They seek nothing but destruction, corruption and instability," Abdullah said of the attackers.

The attack started Saturday morning in the city of Khobar, 250 miles northeast of Riyadh near the Persian Gulf coast, where the suspected militants stormed two oil industry compounds housing offices and employee apartments.

Guards at the compounds said four gunmen wearing military-style dress opened fire and engaged in a shootout with Saudi security forces before fleeing up the street to the Oasis, a vast complex containing apartments and hotels.

Journalists were turned away from the compounds and kept back from the Oasis, where hundreds of Saudi security forces were trying to capture or kill the militants. Saudi forces had fired shots inside the compound, officials said, speaking on condition of anonymity.

According to Oasis residents and an employee, the militants asked questions when they arrived that indicated they were trying to separate Muslims from non-Muslims. Islamic militants have been criticized in the Arab world for previous attacks in which Saudis and other Arabs were killed.

Lebanon's ambassador to Saudi Arabia, Ahmed Chammat, told The Associated Press that five Lebanese hostages had been released.

One of them, Orora Naoufal, said she cowered in her apartment with her four-year-old son for five hours after a brief encounter with two of the gunmen, whom she described as clean-shaven and wearing military uniforms.

She told AP by telephone that the gunmen asked her where the "infidels" and foreigners were, and whether she was Muslim or Christian,

"I replied: 'I am Lebanese and there are no foreigners here."' She said the gunmen told her to "Go convert to Islam, and cover up and go back to your country."

One of the targeted oil industry compounds contains offices and apartments for the Arab Petroleum Investment Corporation, or Apicorp, and the other - the Petroleum Center building - houses offices of various international firms.

A civilian car had slammed into a sign outside the Apicorp compound, and there was a burned car at the entrance and glass shards on the ground. Witnesses earlier said at least 10 ambulances were outside the Oasis, and that hundreds of policemen had surrounded the complex with helicopters overhead.

In addition to Apicorp, oil industry companies with offices in the compounds include a joint venture among Royal Dutch/Shell Group, Total SA and Saudi Aramco; Lukoil Holdings of Russia; and China Petroleum & Chemical Corp., or Sinopec.

The Egyptian boy who was killed was the son of an Apicorp employee, said Mahmoud Ouf, an Egyptian consular officer in Riyadh.

Egypt's Middle East News Agency quoted his father, Samir, as saying his son was on his way to school with other students. "The terrorists opened heavy fire on the car, killing Rami and setting fire to the car," his father said, adding that his daughter ran from the car uninjured.

Employees from the other companies were safe, Shell spokesman Simon Buerk and a Saudi oil industry official, Yahya Shinawi, told AP by telephone.

Other companies believed to be in the compounds included Schlumberger and INOVx, both based in Houston, and Aveva, of Cambridge, England. There was no immediate word on their employees.

State Department spokesman Tom Casey said an American man who worked for an oil company was confirmed dead, but did not identify him or his employer. U.S. State Department spokeswoman Joanne Moore said two Americans were wounded.

Casey said the State Department has not upgraded its travel warning but noted that it was already about as tough as it could get. It is still recommending that Americans defer all nonessential travel to Saudi Arabia and that those there consider leaving immediately.

A CIA spokesperson said the agency could not confirm who staged the attack, but a Saudi official no immediate information about the identity of the militants. But a Saudi security official, speaking on condition of anonymity, said the method of the attack was "definitely inspired by al Qaeda."

Official Saudi reports said only that "militants" had "randomly opened fire" at about 7:30 a.m. and killed and wounded an unspecified number of people. A statement carried by the Saudi Press Agency said security forces had surrounded the militants inside a building in the residential complex and that "they are currently being dealt with."

The pan-Arab satellite television network Al-Arabiya showed the body of a man, apparently shot dead, in the driver's seat of a car and the burned-out frame of a sport utility vehicle. Bullet holes were visible in other vehicles, some with windows smashed and blood staining the seats.

In London, the British Foreign Office was investigating reports that a British citizen was killed. Philippines officials in Manila said they were checking unconfirmed reports that three Filipinos were among the dead.

Two security guards also were believed to be dead, according to a Western diplomat who spoke on condition of anonymity.

Saudi Arabia launched a high-profile crackdown on terrorists after attacks on Riyadh housing compounds in 2003, and claims to have foiled dozens of terror plots in the kingdom.

The most recent attack targeted the offices of Houston-based ABB Lummus Global Inc. in the western city of Yanbu on May 1, killing six Westerners and a Saudi.

Saudi Arabia relies heavily on 6 million expatriate workers, including about 30,000 Americans, to run its oil industry and other sectors. The kingdom produces about 8 million barrels of oil a day.

Many expatriates decided to leave, at least temporarily, after the Yanbu attack. Then, U.S. Ambassador James C. Oberwetter advised Americans to leave the country - a move criticized by Saudi officials.

In April, attackers bombed a security building in Riyadh, killing five people and injuring 148 more.

A week ago, a German who worked as a chef for Saudi Arabia's national airline was shot and killed by unknown assailants. Authorities are investigating whether the attack was linked to terrorism.

In 1996 in Dhahran, an eastern city just outside Khobar, a truck bombing killed 19 American military personnel at the Khobar Towers barracks.