Terror strikes in Al Khobar

Saudi security forces were poised to storm an upscale expatriate housing complex where suspected militants in military attire are holed up with a reported 50 hostages after attacking oil company offices.

"Security forces are preparing to storm the building where gunmen are holding the hostages" at the Oasis compound, a security man at the site said as residents were evacuated from the facility.

Saudi Arabia's Crown Prince Abdullah bin Abdulaziz said at least 10 people, including a child, were killed in the initial rampage.

According to eyewitnesses four armed men aged 18-26 years attacked the residential complex of the Petroleum Centre oil company and took control of the building for several hours. They took many hostage.

At least three Westerners, including an American, were believed among the dead in the second fatal attack on oil industry targets this month. Philippines officials also were investigating whether two of their citizens had been killed, and there were reports the death toll could be as high as 16.

A Saudi security official had said the attack was "definitely inspired by Al Qaida," as evidenced by the method.

Abdullah was speaking at a meeting with professors from King Abdulaziz University in the Red Sea port city of Jeddah.

"Among those killed was a female child," Abdullah said, adding the attackers were now surrounded.

A police officer on the scene said the attackers were surrounded on the sixth floor of a high-rise building in the Oasis housing complex, and had "people with them," meaning hostages. The officer could not say how many hostages were being held.

But a senior manager of the complex said 50 hostages were being held, among them Americans, Italians and Arabs. Some security officials put the number of hostages between 45 and 60.

Area residents said the attackers went into a residential building, separated Muslims from non-Muslims and freed the Muslims. Three Italians were also reported to have escaped.

There had been earlier reports that security officials had stormed the compound and the hostages were freed, but residents said they had heard the security forces had been driven off by grenades and were awaiting reinforcements.

A report carried by the official Saudi Press Agency, attributed to an unidentified senior Interior Ministry official, said four militants fired randomly at a company and at a residential compound at about 7:30am, then entered a residential compound "where the security forces surrounded them in one of the buildings. They are currently being dealt with."

The three sites hit in Al Khobar were a compound of offices and housing for Apicorp, the investment arm of the Organisation of Arab Petroleum Exporting Countries; the Petroleum Centre building that contained offices for various international oil-related companies; and the Oasis residential compound.

A civilian car had slammed into a sign outside the Apicorp compound; at the entrance, a burned car was visible and glass shards littered the ground.

- With inputs from agencies