KHOBAR, Saudi Arabia -- Dozens of American, European, and other hostages were released today, and a gunman believed to be the lead Islamic militant holding them was arrested, a Saudi security official said, adding that two other gunmen were "in the process of being arrested."
The security official would not comment on the whereabouts or conditions of the hostages, saying only: "It has ended. One has been arrested and two are in the process of being arrested -- they are surrounded."
A soldier on the scene said that seven gunmen had been arrested. When told that security officials were saying two were not yet in custody, he said they were on two floors that troops had not yet reached.
Neither the soldier nor the security official would comment further, with the security official saying the Saudi Interior Ministry would issue a statement on the resolution later.
The suspected militants, wearing military-style uniforms, sprayed gunfire inside two office compounds in the heart of the Saudi oil production region yesterday, killing at least 10 people -- including an American -- and then taking dozens of hostages at a luxury expatriate resort.
After an overnight standoff in the city of Khobar, gunfire broke out again this morning, and commandos were seen leaping from a helicopter onto a rooftop.
Security officials had said between 45 and 60 people were held hostage on the sixth floor of a high-rise building in the city's walled Oasis Residential Resorts complex.
Most of the captives were Westerners, including Americans. Earlier, the Dutch Foreign Ministry said three Dutch hostages had been released.
The Arab News newspaper, quoting witnesses, said the attackers had dragged the body of an unidentified victim behind their car before being surrounded by police in the building.
A statement posted on several Islamic websites claimed the attack in the name of the Al-Quds (Jerusalem) Brigade but was signed "Al Qaeda in the Arab Peninsula." It said the attacks targeted US companies and that a number of "crusaders" had been killed.
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, the Saudi-born Al Qaeda leader whose group has been 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.
The attack started yesterday morning in 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.
British and Filipino citizens were reportedly also among those killed in the shooting rampage, as well as 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. The Saudi newspaper Al-Riyadh, however, quoted security officials saying at least 16 people were killed, including seven Saudi security agents.
Journalists were turned away from the compounds and kept back from the Oasis.
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, said five Lebanese hostages had been released.
One of them, Orora Naoufal, said she cowered in her apartment with her 4-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 said in a telephone interview 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
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.
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.
Employees from other companies were safe, according to Shell spokesman Simon Buerk and a Saudi oil industry official, Yahya Shinawi.
Other firms believed to be in the compounds included Schlumberger Oilfield Services, based in Houston, and AVEVA, of Cambridge, England. There was no immediate word on their employees. Kelly Ray, spokeswoman for INOVx, which had been believed to have offices in the compounds, said the company's offices in Saudi Arabia closed in 2001 and it no longer had any employees there.
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. US 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, and a Saudi official offered 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."
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.
Michael Rothman, chief energy strategist at Merrill Lynch in New York, said there might be "a limited psychological reaction" in oil markets but that the attack would not affect supply.
Another analyst, Yasser Elguindi, was more pessimistic.
"This is close to the nerve center of the Saudi oil industry," said Elguindi, of Medley Global Advisers in New York. "It could have a devastating impact on the oil market when we reopen (on Tuesday)."
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.
A history of attacks
A look at previous violence linked to extremism in Saudi Arabia:
May 12, 2003: Car bomb attacks on three Riyadh compounds housing foreigners kill 35 people, including nine suicide bombers.
June 14, 2003: A raid on a bomb-filled, booby-trapped apartment in the holy city of Mecca leaves five suspected Islamic militants and two security agents dead.
July 28, 2003: Saudi police raid a farm where militants had holed up in al-Qassim, 220 miles northwest of Riyadh, touching off a battle that kills six suspects and two officers.
Sept. 23, 2003: Security forces in the southern town of Jizan storm apartment building where terror suspects have barricaded themselves. The raid ends with the death of three suspects, including an alleged Al Qaeda operative wanted by the FBI, and one security agent.
Nov. 3, 2003: Police clash with suspected Al Qaeda sympathizers in the streets of Mecca, killing two militants and uncovering a large cache of weapons.
Nov. 8, 2003: A suicide bombing at a Riyadh housing compound kills 17, most of them Muslims working in Saudi Arabia. US and Saudi officials believe the mastermind is Abdulaziz Issa Abdul-Mohsin al-Moqrin, suspected of being Al Qaeda's top figure in Saudi Arabia.
Jan. 29: Five Saudi security agents are among six killed in a shootout that erupts as agents search a suspected terrorist hideout in the Saudi capital.
April 21: Five people, including two senior police officers and an 11-year-old girl, are killed along with the suicide bomber in an attack on government building in Riyadh. A shadowy Islamic extremist group, the al-Haramin Brigades, claims responsibility.
May 1: Shooters storm the offices of Houston-based
May 20: Saudi security forces clash with five suspected Islamic militants outside Buraida, a fundamentalist stronghold north of Riyadh. Four suspects are killed and a fifth is wounded, according to a security official.
May 29: Gunmen open fire on oil company compounds in Khobar, 250 miles northeast of Riyadh.