Al Qaeda beheads US hostage in Saudi Arabia

1.00pm UPDATE

RIYADH - Al Qaeda militants in Saudi Arabia beheaded American hostage Paul Johnson on Friday and their leader was then killed in a shootout with security forces as he tried to dispose of the body, Saudi officials said.

Abdulaziz al-Muqrin's group posted photographs of the 49-year-old aviation engineer's severed head on a website, six days after he was seized. The Saudi government had refused to free Islamist prisoners by a Friday deadline set by the cell.

Shortly afterwards, as Muqrin and two other top militants deposited the body in the capital Riyadh, they were surrounded by Saudi security men and gunned down, a security source said.

Muqrin, an angry young man driven by revenge and hatred for the United States and its Arab allies, was Saudi Arabia's most wanted al Qaeda leader. His death will be portrayed as a major blow to Saudi-born Osama bin Laden by the kingdom's rulers, once chided by their US allies as being soft on terrorism.

Johnson was the third American killed in Riyadh in the past 10 days, stepping up pressure on thousands of US citizens and other foreigners vital to the economy of the world's biggest oil exporter and on the Saudi royal family, which bin Laden has sworn to overthrow for its close alliance with Washington.

"They're trying to get us to retreat from the world. America will not retreat," said President George W Bush, who declared war on al Qaeda after a mainly Saudi group attacked the United States on September 11 three years ago. "America will not be intimidated by these kinds of extremist thugs."

Vice President Dick Cheney said: "America will hunt down the killers one by one and destroy them."

The US embassy said more attacks were likely and the State Department warned Americans of a risk of violence across the Gulf region after urging many to leave Saudi Arabia this week.

A senior Saudi official in Washington complained, however, that such warnings could play into the militants' hands.

"As we promised, the mujahideen, we have beheaded the American hostage Paul Marshall after the deadline that the mujahideen gave to the tyrannical Saudi government passed," the Falluja Brigade of the Organisation of al Qaeda in the Arabian Peninsula said on its website, using Johnson's first names.

Scarcely had it appeared but Muqrin and fellow fugitives, named by Al-Arabiya television as brothers Faisal and Bandar al-Dakheel, were gunned down in the al-Malazz area of Riyadh.

Special forces backed by helicopters combed al-Malazz into the night. They earlier stormed a building, searching it and making arrests before clashing with Muqrin and his comrades.

The website carried three pictures of what looked like Johnson's severed head -- one showed the bloodied head propped up on the back of a body in an orange, US prison-style, jumpsuit with a knife leaning on the moustachioed face.

Militant attacks have afflicted the birthplace of Islam for more than a year but this was the first such kidnapping in Saudi Arabia and raised concerns of a new tactic. Two other Americans and an Irish cameraman have been shot dead in Riyadh this month.

Beheading prisoners or cutting their throats has been a shock tactic among al Qaeda militants for some time -- American Nick Berg was filmed as he was killed in Iraq last month, as was Wall Street Journal reporter Daniel Pearl in Pakistan in 2002.

Like Johnson, his captors dressed Berg in orange, the colour worn by al Qaeda suspects held by US forces at Guantanamo Bay.

Johnson worked for defence contractor Lockheed Martin on the manufacture of Apache helicopter gunships -- an employment that his killers cited as justifying his selection for killing.

The statement said al Qaeda had killed him because of "what Muslims have suffered from American Apache planes and their rockets". Falluja, whose name appears in the group's signature, is a city in Iraq where US troops have fought insurgents.

"This act is to heal the hearts of believers in Palestine, Afghanistan, Iraq and the Arabian Peninsula," the group said, warning other Americans they would meet the same fate.

"This is so that he can taste what Muslims have suffered from Apache planes and their rockets. The slain American parasite was working on their maintenance and developing their systems in Saudi Arabia," Muqrin's group's statement said.

Earlier, Johnson's family had pleaded for his life. In his home town, the family remained out of sight. But neighbours were angry. One woman said the United States would be justified in killing Saudi prisoners in retaliation:

"We should start eliminating prisoners like they do ours," said Connie Kennedy, 48, in Little Egg Harbour, New Jersey.

The beheading followed a spate of bombings and attacks on oil companies and Westerners, blamed on Muqrin's men. Militants killed 22 foreigners at oil offices and Western residential compounds in the eastern oil city of Khobar last month.

Saudi leaders now hope Muqrin's death may staunch the violence; Nawaf Obaid, a senior Saudi consultant with close links to the security establishment, told Reuters:

"This has been a big blow. The senior leadership of this cell has been decimated and with that, the whole cell will collapse. He is the only leader remaining of this calibre."

Muqrin was a veteran of Bosnia's 1992-95 war and militant expert Mohsen al-Awajy said he was also one of a hit squad that tried to kill Egyptian President Hosni Mubarak in Ethiopia in 1995. He spent two years in jail in Ethiopia before he was extradited to Saudi Arabia in 1998 and tortured, Awajy said.

- REUTERS