"Four terrorists holed up in a house in Sulaibiya area have surrendered," state television said in an urgent bulletin, adding that security forces continued to search the area.

Three Jordanian and two Saudi nationals surrendered to Kuwaiti security forces, the interior ministry said.

Security sources told Reuters that gunfire had erupted in the area but gave no further details.

Security boosted

On Monday, police killed five fighters and captured three, including the group's leader, in a shootout with groups bent on destabilising the US ally.

Used as the main launch pad for the 2003 war in Iraq, Kuwait hosts up to 30,000 US troops and is the key transit route for forces and civilians into Iraq. Some 12,500 American civilians also live in Kuwait.

Authorities have stepped up security around oil and other vital installations after insurgents tried to attack the country's largest refinery and a US military camp last month.

Security sources say Kuwaitis linked to Islamic rebels in Iraq and Saudi Arabia are behind the violence.