Saudi authorities say three suspected gunmen were killed after the attack

The attackers burst into offices at the complex co-owned by Exxon Mobil and a Saudi company, SABIC, in the port town of Yanbu on the Red Sea coast.

Two Americans and an Australian, all engineers employed by ABB-Lummus, also died in the shooting.

A member of the Saudi national guard was also killed in the attacks.

Several eyewitnesses said the body of one of the foreigners was tied to a car and dragged through the streets.

The gunmen had also reportedly fired at a McDonald's restaurant and a hotel.

They were chased into a nearby residential area - where three were shot dead and a fourth was arrested.

'Enormous blow'

Foreign Secretary Jack Straw said he was "shocked and sickened" by the gun attack.

"We cannot let terrorists succeed. Saudi authorities have our full support and we are working hard to tackle terrorism.

"We stand ready to offer our assistance."

The Foreign Office said that Britain's ambassador to Saudi Arabia, Sherard Cowper-Coles, as well as consular staff are travelling to the scene.

The perpetrators of this atrocious attack clearly have no respect for innocent lives Jack Straw

A Saudi ministry statement said: "At 0400GMT on Saturday, four men entered the headquarters of a Saudi contractor in Yanbu and fired at random on Saudis and foreigners.

"Security forces chased them and they took refuge in residential areas and hijacked some cars. Three of them were killed and a fourth was wounded.

"There were a number of deaths and injuries among Saudis and foreigners."

One of the Britons was also employed by engineering firm ABB and the other was a contractor.

ABB spokesman Bjorn Edlund, speaking from Zurich, Switzerland said: "It is obviously an enormous blow. Losing five employees in a terrorist attack is a terrible, terrible thing to happen. We are trying to deal with it as best as we can."

'Continuing battle'

Asked whether the attack was proof that he was not winning the war on terror, Prime Minister Tony Blair said: "The fundamentalist threat, the extremist fanatical threat, is there in every single country today and to win this war is going to take a long time.

"And making sure that Iraq is stable and democratic and a properly run country is an important part of that," the premier, currently in Dublin to attend EU enlargement celebrations, added.

"But this isn't going to end in a week or a month or even a year, this is going to be a continuing battle that we're going to have to fight."

Saudi terror

Saudi Arabia has seen a year-long wave of Islamist militancy, targeting mainly foreigners.

More than 50 people have been killed in suicide bombings in the capital Riyadh, including an attack on a security building last month.

The Yanbu region is home to oil refineries and petrochemical plants that employ many foreigners. Until now it had been largely unaffected by violence in the kingdom.

Earlier this month, the US urged its citizens to leave Saudi Arabia after issuing a warning of "credible indications of terrorist threats aimed at American and Western interests in Saudi Arabia".

The Saudi ambassador to London, Prince Turki al-Faisal, said his government believed that al-Qaeda is to blame.