In intense fighting in the northern town of Al-Ras, security forces say they have killed at least seven terror suspects.
Reports say these include two figures on the Saudis' most- wanted list, namely Saud Homoud al-Oteibi and the Moroccan citizen Abdulkarim al-Mejjati.
Al-Mejjati is suspected of masterminding the suicide bombings in Casablanca in May 2003, and he has also been linked to last year's Madrid train bombings.
The fighting in Al-Ras began on 3 April, apparently as the result of an intelligence tip-off that a terrorist cell was hiding in a house in the town.
The firefight was so intense that authorities had to delay initial plans to storm the house. Eventually, it was taken, but firing then began from another building nearby.
The fighting, which continued yesterday, left dozens of security personnel wounded.
The raid is seen as a significant step because it indicates Saudi forces are successfully taking the anti-terror fight to the militants' stronghold region of Qassim, some 300 kilometers north of the capital Riyadh.
Faisal Ali is the editor of the English-language Jeddah daily "Arab News." He says that the authorities appear to have dampened the country's terror movement, which is led by Al- Qaeda:
"We have seen that the activity of the Al-Qaeda-linked elements have considerably reduced in Saudi Arabia, and after the attack on the U.S. consulate in Jeddah [in late 2004], nothing serious or major has happened for the last three or four months," he says
This period of quiet follows almost two years during which militants carried out some spectacular attacks, such as the raid on the oil town of Khobar which left 22 civilians dead. There was also a raid on the Red Sea port of Yanbu which left
six foreigners and a Saudi dead.
Ali warns that although most of the Al-Qaeda cells appear to have been smashed, as authorities claim, there is no room for complacency:
"One thing is very clear, the serpent of terrorism is still alive. It was wounded, it was lying low, but it is still alive and needs much more effort on the part of the Saudi authorities to suppress it forever," Ali says.
Mai Yamani, a Saudi analyst at the London-based Royal Institute of International Affairs, sees significance in the fact that a prominent Moroccan was among those killed at Al-Ras.
She says it strengthens evidence that Saudi Arabia, the home base of Al-Qaeda, is also becoming a "haven" for foreign terrorists. This is acutely embarrassing for the Western- oriented Saudi government:
"It's a fact, it is very embarrassing for them. And they can't run away from the fact that they themselves have had a big hand in creating these jihadi from the Wahhabi ideology, and from turning a blind eye to, and underestimating the threat coming from, these radical Islamists for so long," she says.
Yamani says authorities have not acted to stop radicals from issuing fatwas seeking to legitimize the insurgency against U.S.-led coalition forces in Iraq. Nor have they moved against websites espousing extremism.
At the same time, Yamani says, liberal Saudi academics remain jailed for their views:
"It is a dangerous situation, because there is contact with the terrorists in Iraq, and the price of arms flowing from Iraq into Saudi Arabia is dropping and becoming cheap," she says. "Also, there are jihadis, as we know, crossing the porous borders into Iraq, either directly or via Syria; and this flow over the border is very alarming."
Compounding the difficulty is the failure by the Saudi royal family to agree on how best to deal with the situation.