A diplomat at the US embassy on Wednesday said he had "no word on casualties" - but confirmed that the compound was home to numerous American citizens.

In a separate incident, Saudi forces killed two nationals after clashes in the city of Taif.
   
Close to Makka in the west of the kingdom, the shootout began on Tuesday when dissidents fired on a police checkpoint.
   
Dubai-based Al Arabiya television said the two men were on a "wanted list" but that they were not linked to the weekend shootings and hostage-taking in the eastern city of Khobar.

Instability growing?

Last Sunday, Khobar suffered its second major attack in a month.
   
Twenty-two civilians were killed in the attack, 19 of them Westerners and other foreigners. Saudi Arabia has been battling insurgents for more than a year.
   
Saudi forces had launched a huge manhunt for three insurgentss who escaped after the Khobar attack, setting up checkpoints and roadblocks across the kingdom.