Gunmen killed two Americans, two Britons and an Australian in an attack on a Western engineering firm yesterday in the Saudi oil and petrochemical hub of Yanbu on the Red Sea, a company spokesman said.

The spokesman for Swiss-based ABB Lummus said two other Americans were wounded in the attack in Yanbu, which together with nearby Jubail is home to much of the kingdom's oil refining and petrochemicals industries, forming the backbone of Saudi industrial development.

Saudi television aired footage of a body slumped in a police car peppered with bullets and a fire-gutted vehicle after the shooting. It also showed bullet holes in a window of US fast food restaurant McDonalds.

It was the first such attack on a Western oil facility in Saudi Arabia, the world's largest oil exporter. Last year, a series of suicide bombings on residential compounds in Riyadh killed more than 50, including nine Americans, in attacks blamed on Al-Qaeda.

The Yanbu gunmen shouted "We are the mujahideen", a media adviser to the Saudi embassy in London, Jamal Kashoggi, quoted an eyewitness as saying. He said this was how Al-Qaeda activists in Saudi Arabia described themselves.

Local journalists quoted witnesses as seeing one of the Westerners being dragged through the streets from the back of a car.

Four of the dead engineers worked for ABB while a fifth was sub-contracted to work for it, spokesman Bjorn Edlund of the oil engineering firm said. Medical sources said 28 Saudis and foreigners were also wounded.

Saudi Arabia, birthplace of Al-Qaeda leader Osama bin Laden, has been battling a year-long wave of Islamist militancy, targeting mainly foreigners. A suicide bomber last month killed at least five people at a security building in Riyadh in the first major militant attack against a government target.

In the Yanbu attack, Saudi Arabia said militants stormed a Saudi contractor's building in the city, killing foreigners and Saudis. It said security forces killed three of the attackers and wounded a fourth.

"At 7 a.m. (0400 GMT) yesterday four men entered the headquarters of a Saudi contractor in Yanbu and fired at random on Saudis and foreigners," the Interior Ministry said in a statement.

"Security forces chased them and they took refuge in residential areas and hijacked some cars. Three of them were killed and a fourth was wounded. There were a number of deaths and injuries among Saudis and foreigners," it added.

The Saudi television footage also showed a car with blood stains in the interior. Local journalists said there had been more than one attack. A Western resident told Reuters a pipe bomb had been thrown at a school in Yanbu.

ABB is under contract to work for the Saudi Yanbu Petrochemical company (YANPET). Officials said operations at the nearby YANPET facility were continuing as normal.

Yanbu is also home to the giant SAMREF export refinery, a joint venture between Exxon and Saudi Aramco. Yanbu port handles oil product exports of more than 400,000 barrels per day. A US-based Exxon Mobil spokesman said none of its employees was hurt and facilities were operating normally.

Bin Laden and his top militants have threatened to carry out attacks to destabilise the kingdom, which they accuse of betraying Islam and allying themselves with the enemy of God - the United States.

A purported audio tape by senior Al-Qaeda leader in the kingdom, Abdulaziz al-Muqrin, has vowed to carry out "fierce" attacks this year against US interests and said Saudi authorities would not be capable of protecting them.