AN AL-QAIDA group in Saudi Arabia yesterday carried out its threat to behead an American engineer they had taken hostage.

A letter signed “The Believer” has urged militants to spare American hostage Paul Johnson as the 72-hour deadline set by his captors was due to end today, saying killing him would break Islamic law.

Saudi authorities are hunting for three suspected al-Qaida terrorists who used hostages as human shields to escape after a weekend assault on a residential complex that killed 22 people, mostly foreign oil workers.

Saudi authorities searched an hotel in a residential compound today for clues left behind by suspected al-Qaida militants – three of whom were on the run - after a shooting rampage and hostage standoff that killed 22 people, most of them foreigners.

SAUDI commandos in helicopters stormed an expatriate resort yesterday to free hostages seized by suspected al-Qaida gunmen in an assault that killed 22 people mostly foreigners, including one American.