RIYADH, June 19 (IslamOnline.net & News Agencies) - An American hostage was beheaded Friday, June 18, by Al-Qaeda members in Riyadh despite frantic efforts to find him by Saudi forces who fought pitched battles with militants and reportedly killed the group’s leader in the kingdom.

Saudi officials confirmed late Friday that Paul Johnson had been decapitated as a 72-hour deadline for his execution ran out, reported Agence France-Presse (AFP).

The body was found in a remote area of Riyadh, Adel Al-Jubeir, diplomatic adviser to Saudi Crown Prince Abdallah bin Abdul Aziz, said in Washington.

"We did everything we could to find him. We are deeply sorry that it was not enough," he said.

Al-Qaeda-linked website showed grisly pictures of his body in a pool blood, his head placed on his back.

A statement accompanying the Internet photos said Johnson had been beheaded by guerrillas from the Fallujah Squad, a reference to the Iraqi city that has been a hotbed of resistance to the US-led occupation.

It said the American was killed after the expiry of the ultimatum given to the "tyrants of the Saudi government."

The militants had sought the release of hundreds of their comrades detained in Saudi jails.

Johnson was the third American killed in Riyadh in the past 10 days, stepping up pressure on thousands of US citizens and other foreigners mainly working in the kingdom’s oil sector.

The US embassy said Friday more attacks were likely and the State Department issues a new warning to Americans.

"We did everything we could to find him. We are deeply sorry that it was not enough," said Jubeir

Shortly after the news broke of Johnson's death Saudi security forces reported killing four militants, including presumed Al-Qaeda chief in Saudi Arabia Abdul Aziz Al-Muqrin, the mastermind of Johnson’s death.

The four were gunned down at a gas station in central Riyadh in a shootout that left two security officers dead, Saudi security sources said. Two suspects fled.

The shootout erupted after Muqrin and the other militants, driving in three cars, were followed by security men apparently acting on a lead from the house where Johnson's body was found.

Brothers Bandar and Faisal Abdul Rahman al-Dakheel, who figured high on a most-wanted list, were shot dead.

However, a statement published Saturday, June 19, denied Muqrin's killing.

"Some satellite networks and news agencies have been propagating the false news that Abdulaziz al-Muqrin, God preserve him, has been killed," the statement said.

"We would like to say that such claims, unleashed by the tyrants of Saudi Arabia, are aimed at dissuading the holy warriors and crushing their spirits."

The statement's authenticity was impossible to verify, but it appeared on a Web site that has had similar messages in the past.

Muqrin topped the most-wanted list which included 26 suspects when it was released by Saudi authorities last December but had gone down to 18 after eight were killed by security forces or turned themselves in.

Friday's events bring the list further down to 14.

The death of the 49-year-old Johnson, an engineer with a giant US defense corporation operating in the kingdom, triggered anger and revulsion in the United States.

The killers are "trying to intimidate America. They're trying to shake our will. They're trying to get us to retreat from the world," US President George Bush said during a campaign stop in the northwestern US state of Washington.

"America will not retreat, America will not be intimidated by these kinds of extremist thugs," Bush added.

"We must pursue these people and bring them to justice before they hurt other Americans."

His Democratic presidential contender John Kerry , who has been critical of Riyadh and its ties to Bush, denounced the beheading as "a grotesque act".

Secretary of State Colin Powell, however, thanked Riyadh for its efforts but archly expressed the hope that the death "will cause our Saudi colleagues to redouble our efforts to go after terrorists wherever they are".