The US embassy identified the dead man as Kenneth Scroggs. Three armed men shot him in the back as he parked in his home garage in the Malaz district of Riyadh on Saturday, witnesses said.
A purported al-Qaida statement posted on an Islamist website late on Saturday claimed the group had killed one American and kidnapped another in Riyadh.
It threatened to treat the captive the same way that US occupation troops treated Iraqi prisoners, in a reference to the sexual and other abuses inflicted on Iraqi detainees at Baghdad's notorious Abu Ghraib prison.
The murder and apparent abduction were the latest attacks in a campaign of anti-Western violence in the kingdom. Scroggs was the third Westerner slain in Saudi Arabia this week.
Several websites carried links to a videotape - also purportedly from al-Qaida - that claims to show the killing of American Robert Jacobs, who was shot at his Riyadh home on Tuesday.
As for the kidnapping, the US embassy did not identify the missing national but said it was working with Saudi officials to find him.
This videotape claims to show
the slaying of Robert Jacobs
The purported al-Qaida statement showed a passport-size photo of a brown-haired man and a Lockheed Martin business card bearing the name Paul M Johnson. It said he was born in 1955.
A Lockheed Martin spokesman confirmed that Johnson was a Lockheed employee but declined to say what his job was.
If confirmed, it will be the first kidnapping of a US citizen in Saudi Arabia.
The statement also said Johnson was one of four experts in Saudi Arabia working on developing Apache helicopter systems and that the American killed worked in the same industry. It did not identify the slain American but said he was killed at his house.
"Everybody knows that these helicopters are used by the Americans, their Zionist allies and the apostates to kill Muslims, terrorising them and displacing them in Palestine, Afghanistan and Iraq," the purported al-Qaida statement said.
It added al-Qaida would release a videotape later to show Johnson's confessions and list its demands.
A Saudi security source told Associated Press that Scroggs worked for Advanced Electronics Co, a Saudi firm whose website lists Lockheed Martin among its customers. The office number on Johnson's business card was for Advanced Electronics.
Meanwhile, on Sunday a body believed to be of a Westerner was found dumped in Riyadh, security sources and a diplomat said.
"We believe it is a Westerner. We are trying to confirm it," the diplomat said. The security sources said the corpse was found dumped near a Saudi security building in Riyadh.
A campaign of anti-Western
violence is rocking Saudi Arabia
It was not immediately known if the body was that of the American who al-Qaida said it had kidnapped on Saturday.
But later, a Saudi police chief denied the report, the official Saudi Press Agency reported.
"There is no truth to media reports that the body of someone
of Western nationality was found in the streets of Riyadh," the capital's police chief was quoted as saying.
An estimated 8.8 million foreigners work among 17 million Saudis in the kingdom, mostly in the oil sector, banking and other high-level businesses.
Last Sunday, an Irish cameraman was killed and a British TV correspondent was critically wounded when fired on while filming in a neighbourhood that is home to many opposed to their government.
The United States has urged all its citizens to leave the kingdom, and the British Foreign Office has advised Britons against all non-essential travel to Saudi Arabia.
British Airways will accommodate Saudi-bound crew overnight in Kuwait because of "safety concerns" but is not worried about flying into and out of Saudi Arabia, a senior executive said on Sunday.
"We are in touch with lots of people and there are no specific threats that we have been made aware of. We would be informed if there were"
British Airways manager,
"We are in touch with lots of people and there are no specific threats that we have been made aware of''.
''We would be informed if there were," country commercial manager for Saudi Arabia, Richard Hirsch, said on Saturday when asked about a threat to Western airlines.
But Hirsch acknowledged that "safety concerns" were behind the decision to overnight crew in Kuwait starting on 9 June.
Flights to London are direct but incoming flights make a "technical stop" in Kuwait, where the crew spend the night, Hirsch said.
Meanwhile, Britain's Foreign Office also said on Sunday it had authorised non-essential staff at the British embassy in Saudi Arabia and their relatives to leave the country if they so wished.
A Foreign Office spokesman said the overall travel advice on the kingdom remained that "all but essential travel to Saudi Arabia" should be avoided.
"We have now authorised voluntary departure of non-essential staff and dependants from our missions," he said.
Six attacks in the country in six weeks on Westerners apparently sent shockwaves through the expatriate community.