Khobar gunmen may have been set free

The security forces in the Kingdom were understood to know the identities of the attackers - thought to be members of the same family - and were confident of capturing them.

Saudi officials said three of the four kidnappers broke out of the residential compound in Khobar using hostages as a human shield before hijacking a car. Their leader was wounded and captured.

But one of the staff at the complex claimed Saudi forces let the gunmen out after they threatened to blow up themselves and their captives.

A hostage heard the gunmen shouting that they would release captives if security forces left, the employee said.

"The security forces refused at the beginning but then apparently relented," he said. "There was a kind of deal reached to let the hostages go free, though some hostages had already been killed."

The man said he heard a gunman say: "Let us go and we’ll let the hostages go."

He said that the security forces refused at first but relented after the militants, who also threatened to blow up the building, began killing hostages.

A senior diplomatic source in Riyadh yesterday said reports of a deal were "entirely" plausible although he could not confirm them. "The last thing the Saudis would want is a lot of dead Westerners. It could be perfectly feasible. At the same time, Saudis in the past have been particularly ruthless in dealing with these people [terrorists]."

Saudi authorities were searching the hotel in the up-market residential compound yesterday for evidence and any explosives left behind by the suspected al-Qaeda militants.

Bloodstains, shards of glass, bullet holes and evidence of grenade blasts scarred the Oasis compound, according to an employee who had been inside the heavily guarded compound assessing damage. Outside, red-and-white concrete barriers, soldiers and gun-mounted vehicles kept people away.

From the gate, broken windows were visible in the upper floors of the hotel where a day-long hostage standoff ended with one attacker arrested and three escaping. Nine hostages were killed. The official death toll from the entire 25-hour ordeal was eight Indians, three Filipinos, three Saudis, two Sri Lankans, an American, a Briton, an Italian, a Swede, a South African and a ten-year-old Egyptian.

A police official said yesterday that the escaping attackers fled to nearby Dammam, where they abandoned the lorry for a car commandeered at gunpoint from an unidentified driver and drove off with police in pursuit. The three remained at large yesterday. Rumours about sightings of the three men at service stations, shopping malls and even eating at a fast food outlet were rife.

Last night, several police cars surrounded a mosque in Khobar after police got word that suspected terrorists were inside. A policeman at the scene said two people had been detained on suspicion of having terrorist connections. He would not elaborate.

Ibrahim al-Yami, a lawyer whose office is close to the mosque, said he saw police take out the muezzin of the mosque and his wife. Mr Yami said he heard one shot fired inside the building.

Despite the escape of all but one of the militants, Saudi interior ministry officials insisted the operation was an overall success, saying that 41 people were freed after police stormed the building. There was no word on the fate of those used as human shields or of their nationality.

A Western diplomat in Saudi Arabia described the attackers as "really smart guys" and said the Saudi security forces did "a pretty good job" in the circumstances.

"There were 242 hostages and only nine of them died. In a lot of other countries in the world, including in the West, there’s a very good chance a lot more would have died," he said.

"[The terrorists] were highly motivated and well-trained," he added. "They went out with a plan and did it. They didn’t just get holed up in one place. And they survived. It’s worrying they’re still on the loose but they’re not the only ones out there."

Eyewitnesses said they were highly sceptical of official accounts that there were only four kidnappers, insisting others were seen during the earlier attacks on two oil industry office buildings and entering the sprawling compound. It was also reported that they arrived in three vehicles.

A leading exiled Saudi dissident claimed there was no deal and the attackers had escaped because of the incompetence of the Saudi security forces.

A fifth, heavily armed militant outside the compound helped the others escape by firing on the Saudi forces surrounding the area to create a diversion, he said.

The three gunmen escaped at 3am on Sunday, four hours before Saudi commandos raided the hotel, he claimed.

The carnage in Khobar has raised many questions.

The Saudi authorities have rounded up more than 600 suspects and killed many others in the past year and claim their "iron fist" policy is working. Yet the attacks continue.

That the Khobar attackers wore military uniforms has raised fears of collusion between militants and the security forces.