Hostages freed after 'Al-Qa'ida militants' kill 16

Tens of European, US and other hostages were released today and a gunman believed to be the lead militant holding them was arrested, a Saudi security official said.

Tens of European, US and other hostages were released today and a gunman believed to be the lead militant holding them was arrested, a Saudi security official said.

He added that two other gunmen were "in the process of being arrested" and later reports said that two were killed.

As many as 16 people, including one Briton and a 10-year-old boy, had been feared dead after suspected Islamic militants opened fire inside two oil industry compounds in Saudi Arabia yesterday, before taking up to 50 foreigners hostage in a residential area.

Witnesses and security sources said the militants tied the body of the Briton, an employee of the oil firm Apicorp, to a car and dragged it more than two miles before dumping it near a bridge.

The gunmen took cover in an expatriate housing complex where the hostages were taken. As Saudi security forces moved in the gun battle continued into last night.

A Saudi security official claimed that the attack was "definitely inspired by al-Qa'ida". A statement purporting to be from al-Qa'ida, posted on a website, claimed responsibility.

This is the second attack on foreign workers in the kingdom this month. On 1 May five people, including two Britons, were killed in a gun attack on an oil refinery in the city of Yanbu, on the Red Sea coast, north of Jeddah. Crown Prince Abdullah said that the terrorists were deliberately damaging the Saudi economy and promised to deal with the militants "with force".

He said: "Those [militants] want to harm the economy and foreigners so that they no longer come here."

The incident began when up to four gunmen in military dress drove cars with military markings into the Apicorp complex in the eastern city of Khobar and began shooting. They entered the Oasis housing compound where they

took the hostages, believed to be Americans, Italians and Arabs. An employee at the Oasis compound said the militants asked residents to show their identity cards to find out their religion. They separated Muslims from non-Muslims and freed the Muslims.

Hundreds of Saudi police evacuated and cordoned off the complex before trying to storm the building. Reports last night said that the militants and the hostages were holed up on the sixth floor of a high-rise building and at one point the Saudi security forces had been driven off with grenades and had had to wait for reinforcements.

A policeman said the militants were using the hostages as human shields and that security officials were trying to negotiate a release. "Security forces are worried about storming because the gunmen have grenades," he said.

An American, a Briton, the 10-year-old boy (from Egypt), two Filipinos, an Indian and a Pakistani, are believed to have been killed, along with two Saudi civilians and seven security force members, although the prince put the number of dead at 10.

The Egyptian boy is believed to have died when the car he was riding to school in was fired upon. "The terrorists opened heavy fire on the car, killing Rami and setting fire to the car," his father said.

Oliver Alabaster, the brother-in-law of one of the compound's residents, who hid behind a cupboard and phoned through to the US, told the BBC that his relative "awoke to see black-hooded men enter a house across the street. She saw her neighbour run out of the back door, then saw her shot in the legs".

Khobar is the centre of Saudi Arabia's oil industry, which relies on 6 million expatriate workers.

The three sites hit were an offices and housing compound for Apicorp (the investment arm of the Organisation of Petroleum Exporting Countries), the Petroleum Centre building that contains offices for oil companies including Royal/Dutch Shell and Russian and Chinese companies, and lastly the Oasis residential compound.