Seated on a cushion in a large, carpeted tent on the grounds of his Riyadh (search) palace, Prince Bandar bin Sultan (search) puffed on a cigar and insisted the recent terror attacks will not drive his Al Saud family from the power it has held for nearly three centuries.

"Mark Twain could have been talking about Saudi Arabia (search) or the Saudi royal family when he said: 'Reports of my demise are slightly exaggerated,'" the prince, his kingdom's longtime ambassador to Washington, said in an interview with journalists.

While the prince may have slightly misquoted Twain -- the writer said "the reports of my death are greatly exaggerated" -- he says the royal family won't be cowed by attacks like the May 12 suicide assault on three residential compounds for foreigners in Riyadh.

Many believe the assault, which killed 34 people including eight Americans and the nine attackers, was aimed at undermining the Al Saud family as much as the United States.

"If this country and its leadership, particularly the royal family, will be shaken or collapse by an action like this, they deserve to collapse," Bandar said in the interview last week. "But this family has governed in one form or another since 1747.

"You can call us anything you want, politically stupid you can't. Time and survivability are a proof that somebody knows what they're doing."

Yet some see the assaults as the single greatest threat to the monarchy since 1979, when radical Muslims took over the holy mosque in Mecca.

Those radicals had the same grievances as Saudi-born Usama bin Laden, who is believed to be behind the May 12 attacks. Bin Laden has said the royal family is not Islamic enough and by being friendly with America it is just as much an infidel as the United States.

Diplomats believe the family is for the moment stable. But they say there are fault lines within the 6,000-strong Al Saud tribe that terrorists are taking advantage of.

Muslim extremism, diplomats believe, has grown as a result of lack of oversight over what's being taught in Saudi schools and said in mosques. The lack of oversight comes amid fear of questioning the extremists' actions and, according to Bandar, underestimating the "cuckoo" -- bin Laden.

But over the past few months, the Saudi government has fired hundreds of imams for preaching extremism. It has also made it clear that politics in mosques is forbidden, detained thousands of suspected Al Qaeda sympathizers of whom 200 to 300 are still in custody and taken tentative steps on economic reforms.

Crown Prince Abdullah, in a forceful speech hours after the attacks, said the government will target not only would-be suicide bombers, but also those who rationalize their actions and incite them.

"We are going after them with vengeance now," said Bandar. "Those people, there's no love lost between us and them. They are after us, so why would we have sensitivity to them?"

But Saudi officials have stressed their measures do not mean an end to a relationship that has evolved over centuries between the royal family and the religious establishment that gives it legitimacy. Saudi Arabia is the birthplace of Islam.

A Western diplomat said beyond the immediate security concerns, the real test will be how well the monarchy deals with the bigger questions of reforms and modernizing the economy and government institutions -- issues over which the royal family is divided.

Prince Talal bin Abdul-Aziz, a brother of King Fahd and son of Saudi Arabia's founder, King Abdul-Aziz Al Saud, has asked why family members aren't working together, talking to each other more often, to the resolve differences that have held up reform.

"Where is the royal family?" Talal said in an interview with The Associated Press in Riyadh. "They only see each other at weddings or funerals. This is one of the family's weak points."

Talal, in his 70s, does not hold government office, but has been pushing for a more open political system for decades. In 1962, he had to flee to Egypt because of his liberal ideas. He was allowed to return in 1964 after reconciling with then King Faisal.

Bandar said the government wants to modernize, but not necessarily Westernize. And he says it should be given credit for having come a long way in a short time.

Bandar, 54, said when he was 9, he lived on an unpaved street in a mud house in downtown Riyadh. His home had one, crude bathroom and family members stood in line for the weekly bath.

Today, thanks to oil money, Saudi Arabia boasts some of the region's best infrastructure, latest technology and best shopping centers.

"When we see something that we want to do badly or want to go for, we do exactly the reverse of the American character," said Bandar. "We stop ... and then we move very slowly until we are sure, then we go all the way."

"When you're in the desert and you're very thirsty and you see something flashing way out there, you have to make damn sure -- is it mirage or is it the real thing?" he said. "Because once you commit to go for it and you find it's mirage, you're dead."