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RIYADH, Sunday (Reuters) Suspected al Qaeda suicide bombers devastated a Riyadh residential compound of foreigners mostly from Arab states on Sunday, killing between 20 and 30 people and injuring up 100, diplomats said.

The huge explosion that gutted the Muhaya compound in the west of Saudi Arabia's capital occurred after Western nations issued fresh terror alerts and Washington shut its missions in the kingdom, the world's biggest oil exporter.

Witnesses said there was heavy gunfire when the bombers drove two apparently explosives-packed cars into the complex, which had security guards. One resident said most of the people living in the compound were Lebanese, Egyptians and Syrians.

"This is a crime against innocents which is in the style of al Qaeda. It is an al Qaeda operation," a Saudi security source told Reuters. "This is a suicide operation."

As rescuers searched amid rubble and raging fires, a Saudi-based senior Western diplomat said: "We don't have an exact toll and this is initial, but our best guess is that between 20 to 30 were killed and 50 to 100 were injured."

One American was injured and another was reported missing, a U.S. diplomat said, but it was unknown if they were of dual nationality. In Washington, a U.S. State Department spokeswoman said: "It appears that no U.S. diplomats live at the compounds."

Saudi Arabia, birthplace of Islam, is battling a surge in Islamist violence. Supporters of al Qaeda leader Osama bin Laden have threatened both Saudi rulers and Western expatriates who hold key jobs in the kingdom.

A Western diplomat said Interior Minister Prince Nayef and some other Saudi royals had private homes near compound. "It was about half a mile from one of the houses of Prince Nayef," the diplomat told Reuters.

The diplomat said the compound might have been chosen as a "soft target" after a recent tough crackdown by security forces.

A Reuters correspondent at the scene said: "I saw two bodies, one being carried away and another lying on the grass of the compound. Whole walls of the 200 villas were blown out and glass covered the compound."

The explosion gouged a crater five metres (yards) wide and two metres deep. Children's toys were strewn among the rubble.

Soldiers, police, medics and firefighters rushed to try to find survivors under the rubble, using detectors and search lights. Helicopters flew overhead and police sirens wailed.

The powerful explosion shook windows in central Riyadh several kilometres (miles) away. "I can see one of the (bombers') cars which is completely destroyed and I can see human remains," said a Saudi television correspondent said. "We don't know how many terrorists were in the cars."

The Saudi TV reporter said many of the injured taken away by ambulance were children under the age of 10. A Jordanian resident at the compound who identified himself only as Alaa said he heard heavy gunfire before the explosion.

"I heard shots, many shots, and then one big explosion. "Many villas were damaged, four or five even collapsed. My house was far away but my windows were shattered," he told Reuters.

"Four villas out of a total of 200 villas are occupied by Westerners, the rest are Arab nationals," Hanady al-Ghandakli, director of Muhaya compound, told Al Arabiya, which is partly Saudi-owned. Arab television reports said three Americans and three Canadians of Arab origin were among the casualties.

"This is a crime against Arabs and Muslims and innocent people and those who carried out this evil act are defiling Islam," one survior told Al Arabiya.

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