RIYADH, June 19: Saudi authorities said on Saturday they had killed Al Qaeda's top leader in the kingdom and three other prominent militants, hours after the group carried out its threat to behead US hostage Paul Johnson.

State television broadcast pictures of four bloodied corpses. It named the dead men as Abdulaziz al-Muqrin, Saudi Arabia's most wanted man, and three others behind the recent surge of violence against foreigners in the kingdom.

Twelve others were arrested, including one senior militant believed to have been involved in the 2000 bombing of the US warship Cole off the coast of neighbouring Yemen.

"This is a massive blow to the militants," a source close to Saudi security officials said. "A huge number of the group around Muqrin were taken out last night - killed or arrested."

The men were killed in a shootout on Friday night as they tried to dispose of the body of Johnson, who was beheaded after the Saudi government refused to free militants by a Friday deadline set by Muqrin's cell.

Muqrin's group had posted photographs of Johnson's severed head on a website, six days after the 49-year-old aviation engineer was kidnapped in Riyadh.

The televised pictures of the four dead militants appeared aimed at refuting a purported Al Qaeda statement posted on a website which denied Muqrin was dead.

An Interior Ministry statement read out on television named the other three dead militants as Faisal al-Dakheel, Turki al-Muteiri and Ibrahim al-Dreihim. Dakheel was wanted for killings including that of an American in Riyadh, it said.

Muteiri was one of the militants who had escaped after an attack on foreigners in the Gulf city of Khobar in May and Dreihim had been involved in preparation of the bombing of an expatriate residential compound in Riyadh in November, it said.

The statement said the four men were tracked down to a petrol station in the Malazz district of central Riyadh.

"Immediately security forces surrounded them and there was a fierce exchange of fire which resulted in the deaths of all four. It also resulted in the death of one member of the security forces and the wounding of two others," it said.

Security forces found three cars, including one used in an attack earlier this month on a British Broadcasting Corporation television crew in Riyadh, it added.

They also found guns, three rocket propelled grenades, 16 pipe bombs, 10 hand grenades and currency worth around $37,000.

The 32-year-old Muqrin was Saudi Arabia's most wanted Al Qaeda leader.

He was a veteran of Bosnia's 1992-95 war and one of a hit squad that tried to kill Egyptian President Hosni Mubarak in Ethiopia in 1995, said militant expert Mohsen al-Awajy.

"He's a killer. He wanted to kill as many people as he could before he died," Awajy said. Muqrin spent two years in an Ethiopian jail before extradition in 1988 to Saudi Arabia where he was tortured in prison, he added.

Saudi officials, once chided by their US allies as being soft on terrorism, are expected to portray his killing as a major setback for Saudi-born Osama bin Laden.

Prince Salman bin Abdulaziz, governor of Riyadh, said Saudi Arabia was working to "wipe out this corruption". But he said he could not rule out a violent response from Al Qaeda.

US ambassador to Saudi Arabia James Oberwetter told a news conference: "I reject categorically any insinuation that the terrorists are winning. They may achieve some small victories over individuals but they will not prevail over the force of civilisation."

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 Osama has sworn to overthrow for its close alliance with Washington.-Reuters