Saudi Arabia's ambassador to the United States said Sunday that security forces rescued seven of the American hostages taken by suspected Islamic militants in Khobar (search).

Prince Bandar bin Sultan (search) told U.S. authorities that five of the former hostages were unharmed, while two had suffered injuries.

On Saturday, gunmen wearing military-style uniforms sprayed gunfire inside two office compounds in the heart of the Saudi oil region, killing 16 people, including an American. The attackers then took dozens of people hostage at a luxury expatriate resort.

After an overnight standoff, gunfire broke out again and commandos were seen leaping out of a helicopter onto a rooftop. However, it was unclear whether they were raiding the building or just taking up positions.

Security officials said between 45 and 60 people were being held hostage on the sixth floor of a high-rise building in the city's walled Oasis Residential Resorts complex.

Most of the captives were Westerners, including Americans. The Dutch Foreign Ministry said three Dutch hostages had been released.

The Arab News newspaper, quoting witnesses, said the attackers had dragged the body of an unidentified victim behind their car before being surrounded by police in the building.

A statement posted on several Islamic Web sites claimed the attack in the name of the Al-Quds (Jerusalem) Brigade (searchbut was signed the "Al Qaeda in the Arab Peninsula." It said the attacks targeted U.S. companies and that a number of "crusaders" had been killed.

Prince Bandar called the attack "a cowardly and despicable act of murder."

"These terrorists have no respect for human life and no regard for the principles of Islam," he said in a written statement.

The attack in Khobar, 250 miles northeast of Riyadh, was the second deadly assault this month against the Saudi oil industry and came amid oil prices driven to new highs partly by fears that the Saudi kingdom is unable to protect itself from terrorists.

Usama bin Laden (search), blamed for past terror attacks in Saudi Arabia, has vowed to destabilize the oil industry and the Saudi royal family for its close ties to the United States.

Saudi Crown Prince Abdullah (searchsaid about 10 Saudis and foreigners were killed in the Khobar attack. The Saudi newspaper Al-Riyadh, quoting security officials in its Sunday edition, put the number dead at 16, including seven Saudi security agents.

An American man, a 10-year-old Egyptian boy and three Filipinos were among those confirmed killed. British citizens and Saudi guards were also reportedly among the dead.

The attack started Saturday morning as the gunmen stormed two oil industry compounds housing offices and employee apartments.

Guards at the compounds said four gunmen wearing military-style dress opened fire and engaged in a shootout with Saudi security forces before fleeing up the street to the Oasis, a vast complex containing apartments and hotels.

Several Saudi newspapers reported Sunday that the attackers threw at least one body from the building where they were holed up and had mutilated some of the bodies of those they killed.

The Arab News said the gunmen dragged a body behind a car, mirroring an attack earlier this month in western Saudi Arabia. Gunmen in that attack had dragged the body of an American victim from the bumper of their car.

The pan-Arab satellite television network Al-Arabiya showed the body of a man, apparently shot dead, in the driver's seat of a car and the burned-out frame of a sport utility vehicle. Bullet holes were visible in other vehicles, some with windows smashed and blood staining the seats.

Journalists were turned away from the compounds and kept back from the Oasis, where hundreds of Saudi security forces were trying to capture or kill the militants. Saudi forces had fired shots inside the compound, officials said, speaking on condition of anonymity.

According to Oasis residents and an employee, the militants asked questions when they arrived that indicated they were trying to separate Muslims from non-Muslims. Islamic militants have been criticized in the Arab world for previous attacks in which Saudis and other Arabs were killed.

Lebanon's ambassador to Saudi Arabia, Ahmed Chammat, told The Associated Press that five Lebanese hostages had been released.

One of them, Orora Naoufal, said she cowered in her apartment with her four-year-old son for five hours after a brief encounter with two of the gunmen, whom she described as clean-shaven and wearing military uniforms.

She told AP by telephone that the gunmen asked her where the "infidels" and foreigners were, and whether she was Muslim or Christian,

"I replied: 'I am Lebanese and there are no foreigners here."' She said the gunmen told her to "Go convert to Islam, and cover up and go back to your country."

One of the targeted oil industry compounds contains offices and apartments for the Arab Petroleum Investment Corporation, or Apicorp, and the other — the Petroleum Center building — houses offices of various international firms.

A civilian car had slammed into a sign outside the Apicorp compound, and there was a burned car at the entrance and glass shards on the ground. Witnesses earlier said at least 10 ambulances were outside the Oasis, and that hundreds of policemen had surrounded the complex with helicopters overhead.

In addition to Apicorp, oil industry companies with offices in the compounds include a joint venture among Royal Dutch/Shell Group, Total SA and Saudi Aramco; Lukoil Holdings of Russia; and China Petroleum & Chemical Corp., or Sinopec.

The Egyptian boy who was killed was the son of an Apicorp employee, said Mahmoud Ouf, an Egyptian consular officer in Riyadh.

Egypt's Middle East News Agency quoted his father, Samir, as saying his son was on his way to school with other students. "The terrorists opened heavy fire on the car, killing Rami and setting fire to the car," his father said, adding that his daughter ran from the car uninjured.

Employees from the other companies were safe, Shell spokesman Simon Buerk and a Saudi oil industry official, Yahya Shinawi, told AP by telephone.

Other companies believed to be in the compounds included Schlumberger, based in Houston, Texas, and Aveva, of Cambridge, England. There was no immediate word on their employees. Kelly Ray, spokeswoman for INOVx, which had been believed to have offices in the compounds, said the company's offices in Saudi Arabia closed in 2001 and it no longer had any employees there.

State Department spokesman Tom Casey said an American man who worked for an oil company was confirmed dead, but did not identify him or his employer. U.S. State Department spokeswoman Joanne Moore said two Americans were wounded.

Casey said the State Department has not upgraded its travel warning but noted that it was already about as tough as it could get. It is still recommending that Americans defer all nonessential travel to Saudi Arabia and that those there consider leaving immediately.

The attack came as Saudi Arabia, OPEC's most powerful member, is urging the group to boost oil production to try to reduce the high cost of crude.

Peter Gignoux, a London-based oil adviser for GDP Associates in New York, said news of the attacks might trigger a further rise in oil prices but noted that oil facilities were unaffected.

In London, the British Foreign Office was investigating reports that a British citizen was killed. Philippines officials in Manila said they were checking unconfirmed reports that three Filipinos were among the dead.

Saudi Arabia launched a high-profile crackdown on terrorists after attacks on Riyadh housing compounds in 2003, and claims to have foiled dozens of terror plots in the kingdom.

The most recent attack targeted the offices of Houston-based ABB Lummus Global Inc. in the western city of Yanbu on May 1, killing six Westerners and a Saudi.

Saudi Arabia relies heavily on 6 million expatriate workers, including about 30,000 Americans, to run its oil industry and other sectors. The kingdom produces about 8 million barrels of oil a day.

The Associated Press contributed to this report.