Saudi security forces killed seven insurgents in a siege in al-Ras on Monday, security sources said. One Saudi policeman was also killed.
The confrontation was the first major firefight between the authorities and anti-monarchy insurgents in months.
The Saudi authorities say recent municipal elections have undermined the little support the insurgents once had.
But Saad al-Faqih, a Saudi opposition activist based in London, told Aljazeera.net the insurgents' fierce resistance proved al-Qaida-linked fighters remained determined to overthrow the monarchy.
"The jihadis will not be influenced by things like sham elections," he said.
Al-Faqih said: "The security forces have succeeded in making life difficult for them but this has been counterbalanced by the fact that Iraq is acting as an effective shelter for about 3000 Saudis opposed to the government.
"This means that the regime's opponents are more dangerous than ever."
According to him, the insurgents have changed the focus of their attacks from foreigners and security forces to oil installations and the royal family itself.
"Iraq is acting as an effective shelter for about 3000 Saudis opposed to the government. This means that the regime's opponents are more dangerous than ever"
"The fact that there have been extensive security checks all over Saudi Arabia in recent weeks means that the regime definitely does not have the situation under control," al-Faqih said.
Tawfiq al-Saif, a London-based expert in the Saudi affairs, told Aljazeera the Saudi government had underestimated "the scale of the enemy".
But he said the recent elections had created a new atmosphere of openness in the country and given people hope that reform was about to happen.
Al-Saif said an economic upturn in the kingdom and political advances in Iraq have swept the rug from underneath the "extremist movements".
Nevertheless, he warned that the increase in Saudi youths going to Iraq to either fight or train, and the growth in arms smuggling into the kingdom, was worrying.
Crown Prince Abd Allah says the
insurgents have little support
Violence blamed on al-Qaida since May 2003 has killed 90 civilians, according to official Saudi figures. Thirty-nine members of the security forces and 92 fighters have also been killed.
The Saudi government's opponents say the monarchy is dictatorial, corrupt and beholden to the West.
For its part, the monarchy says the insurgents have little support and are trying to create chaos inside the kingdom.