Some reports say three civilians
were killed in the clashes
Saudi Arabia's Interior Ministry said on Sunday that five people, suspected of preparing a "terrorist" attack, and two security men were killed in the raid.
Earlier, the daily Okaz newspaper said 10 people had been killed.
Saudi security forces arrested several suspected "terrorists", including two Chad nationals, an Egyptian and a Saudi, the Interior Ministry said in a statement carried by the SPA agency.
Five security men and four citizens were also wounded in the shootout that started when Saudi police raided an apartment building in Mecca's Khaldiya district.
The apartment where the suspects were living was "booby-trapped and ready to blow up," said the statement.
Police seized 72 locally-made bombs of various sizes, in addition to several automatic rifles, guns, ammunition, communication devices, masks and chemicals to be used in bombs, it said.
Seven people on a Riyadh wanted list were also arrested, reported Okaz.
The London-based opposition Movement for Islamic Reform in Arabia (MIRA), citing “diverse sources” in Saudi Arabia, said that eight security officers and three civilians were killed in the clash.
One of the arrested suspects was also described as wearing a belt strapped with bombs, reported Okaz.
A captain in the security forces was among those killed, said the daily. The paper reported a lieutenant-colonel and three sergeants were among the wounded. According to MIRA, large security forces were sent to the area and carried out wide-scale searches.
It was not clear whether the suspects were linked to the 12 May suicide bombings against three expatriate compounds in the capital Riyadh that left 35 people killed.
Journalists reported that security measures had been stepped up in Riyadh and the economic centre of Jeddah, following the clashes.
Roadblocks and checkpoints were set up on the main roads.
Last month 15 men and women, allegedly members of a "terrorist" cell, were arrested in the holy city of Medina. Two security men were killed in a shootout with suspects on 31 May in the northern province of Hail.
Riyadh last week signed a pact with its southern neighbour Yemen to combat cross-border arms smuggling, following reports that explosives used in the Riyadh attacks came from Sanaa.
US President George W Bush earlier this month praised Saudi Arabia for what he described as successes in fighting "terrorism".