An Interior Ministry official said police had been looking for the four-wheel-drive car and security sources said it was discovered early on Saturday morning in an eastern Riyadh neighbourhood where militants have often clashed with police.

Saudi Arabia is battling a surge in bomb attacks and armed violence believed to be linked to Saudi-born Usama bin Ladin's al Qaida network and the kingdom has cracked down on Qaida suspects since bomb explosions killed at least 50 people last year.

On Tuesday, police found two similar car bombs north of Riyadh. Five police officers were killed in fierce clashes in and around the capital last week, as well as two neighbourhood patrol guards.

On Thursday, the United States ordered nonessential diplomats out of Saudi Arabia and warned all Americans they should leave, citing fresh signals of possible attacks on US and Western interests.

The British embassy also urged its citizens to be alert.

Since Monday, police have been hunting down a group of militants who fled the capital after gun battles in which they fired rocket propelled grenades at police. The same group is believed to have killed four policemen at checkpoints.

A security source said police had arrested an al=Qaida suspect  in the Red Sea city of Jeddah in connection with the recent clashes but he did not give more details.

Islamist website

Last week, one of Saudi Arabia's most wanted al Qaeda suspects, in a video carried on an Islamist website, called on Muslims to kill Americans everywhere and vowed attacks against Arab leaders allied to Washington.

Saudi Arabia, the world's biggest oil exporter, is a close US ally. It has blamed the 2003 bombings at Riyadh residential compounds on al Qaida, widely believed to be behind the September 2001 attacks on the United States.

A leading cleric at Islam's holiest shrine in Saudi Arabia told Muslims on Friday it was their duty to foil militant attacks. Saudi Arabia has offered rewards of up to $1.9 million to any one with information leading to militants' arrests.