e future: new US-Russia arms race: Welcome back to the future of US-Russian rivalry. Analysts say that a combination of US military efforts - including missile defense, plans for new low-yield nuclear weapons, and expansion up to Russia's western doorstep - are chilling relations with Moscow and spurring a new, higher-tech arms race.

MIDDLE EAST: Qaeda Escalates Battle in Saudi with U.S. Death Threat

RIYADH (Reuters) - Al Qaeda guerrillas showed images of a blindfolded American hostage and said they would kill him if the Saudi government failed to free jailed militants within 72 hours.

AFP Slideshow: American Worker Kidnapped in Saudi Arabia

"My name is Paul Marshal Johnson and I am a citizen of the United States," a slurred voice with an American accent said in a recording on an Islamist Web site on Tuesday. "I work for Apache helicopters."

The threat to kill Johnson, which follows a spate of suicide bombings and shootings in the past six weeks, raised the stakes in al Qaeda's war to topple the kingdom's pro-U.S. monarchy and drive out Westerners from the world's largest oil exporter.

"If the tyrants in the Saudi government want to secure the release of the American hostage, they must release our mujahideen held hostage in its jails. They have 72 hours from today or else we will sacrifice him," said an al Qaeda statement carried on Sawt al Jihad Web site.

The statement, dated Tuesday, was signed by the Qaeda Organization in the Arabian Peninsula. Sawt al Jihad has carried similar messages in the past.

On Saturday, al Qaeda said it was holding Johnson, a U.S. engineer and the first Westerner to be kidnapped in a wave of militant attacks in the kingdom that began more than a year ago. It also claimed responsibility for killing American Kenneth Scroggs, who was shot dead as he parked his car at his villa.

Saudi government foreign affairs adviser Adel al-Jubeir told CNN that his government was looking into the situation and consulting the United States on what actions to take.

"And then we will make decisions on what the next steps are but our history has been one of not negotiating with terrorists," he said.

De facto Saudi ruler Crown Prince Abdullah said on Wednesday the kingdom would strike against al Qaeda soon.

"We have forces and until now they have not appeared but you will see them in the coming days," he said in remarks on Saudi media. "We can only be patient for so long and from now on you will see things that will reassure you."

Concerns about security in Saudi Arabia had helped push world oil prices to record highs recently before oil producers said they would increase output.

A State Department official said Washington will use every appropriate resource to gain Johnson's safe release in cooperation with the Saudi government.

"Saudi Arabian authorities can count on the United States to give them an assistance they request or need ... The U.S. government makes no concessions to individuals or groups holding our citizens," the State Department official said.

The leader of al Qaeda in Saudi Arabia, Abdul Aziz al-Muqrin, promised in earlier statements that 2004 would be "bloody and miserable" for the kingdom.

DEADLY CAMPAIGN

The U.S. embassy in Riyadh declined to comment on the latest Internet statement and images of Johnson, blindfolded and wearing an orange uniform, sitting in a chair.

Al Qaeda justified kidnapping Johnson, saying "the gunfire of Apache helicopters was killing Muslims in Afghanistan (news - web sites) and Palestine."

"The blood of Muslims is being spilled all over the globe and by the will of God, the blood of this parasite will flow in the rivers of blood of Crusaders that will run this blessed year," the statement said.

"Muslims in the East and the West, we took a vow upon our selves to make you victorious and we will not fail. God has unleashed the mujahideen upon the Crusaders, and they love death as much as you (Westerners) love life," it added.

Saudi Arabia has so far remained silent on how it plans to protect Westerners and thwart further attacks.

Interior Minister Prince Nayef said on Wednesday security forces were capable and "these youths (militants) have been brainwashed and are tools in the hands of the enemies of Islam and the kingdom."

Saudi Arabia, the birthplace of Islam, has arrested and killed scores of militants in a crackdown on al Qaeda. Riyadh says the militants are now going after soft targets but analysts said the attacks appeared to be part of an organized campaign.

Saudi-born Osama bin Laden (news - web sites)'s group, blamed for the September 11, 2001, attacks on U.S. cities, has vowed to destabilize Saudi Arabia and drive Westerners out of the "holy land."

In one of its biggest attacks, 22 civilians were killed when militants went on a May 29 shooting spree and took dozens of foreign hostages in the oil city of Khobar.

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Kidnappers of American in Saudi Arabia Threaten to Kill Him in Three Days

An Islamist Web site showed this image of Paul Marshall Johnson Jr., an American engineer.

CAIRO, June 15 - Islamic militants holding an American engineer hostage in Saudi Arabia on Tuesday threatened to execute him within 72 hours unless the kingdom released the group's fighters from jail.

In film posted on an Islamist Web site, the blindfolded hostage, Paul Marshall Johnson Jr., haltingly repeats his full name and says that he is an American and that he works on Apache helicopters. Shown from the side in the greenish light of a night vision camera, Mr. Johnson, 49, has a dragonlike tattoo visible on his left biceps where his shirt has been torn away.

The posting includes both a written threat from the group, Al Qaeda in the Arabian Peninsula - which is believed to be inspired by Osama bin Laden's terror network, rather than an official arm of it - and a videotaped recording echoing the same Friday deadline by Abdelaziz al-Muqrin, the self-proclaimed leader of the group.

"If the tyrannical Saudi government wants their American master to be released, then they have to release our holy warriors that are held in Hair, Ruweis and Alisha prisons within 72 hours of this statement's date," the statement reads. "Or else we will sacrifice his blood to God in revenge for our Muslim brothers who have been liberally killed everywhere."

Hundreds of militants are held in the three Saudi jails mentioned, although the exact number is unclear.

Since late last fall, 400 to 500 militants had been detained, according to an interview in April with Sayid A. al-Harthi, the senior adviser to Prince Nayef, the interior minister. But other analysts now put the number at twice that, with some 350 men arrested who are believed willing to carry out attacks and 600 to 700 sympathizers eager to offer cars, safe houses and other logistical support.

Starting last year, the often secretive Saudi government took the unprecedented step of printing posters with the pictures of the 26 most-wanted terrorists, slapping them up on pillars around big cities and offering a reward for the militants' capture. One turned himself in, seven have been killed and the remaining 18 are still at large.

They include Mr. Muqrin, who has issued repeated statements in recent months taunting the Saudi government for its inability to rein in the militants. A veteran fighter in Afghanistan and Bosnia, he claimed responsibility for an attack in the oil hub of Khobar on May 29 that killed 22 people, including 19 foreigners, vowing to make the coming months "bloody and miserable for infidels" so that they would all quit the birthplace of Islam.

The statement posted late Tuesday on the Web site - one used to post such claims before - says the holy warriors of the Arabian peninsula's Falluja Brigade struck the engineering team that "oversees the development of the American Apache helicopter that attacks Muslims in Palestine and Afghanistan."

The statement took credit for killing what it called the director of the team and kidnapping an engineer. The statement on Saturday announcing the kidnapping had threatened to treat Mr. Johnson like the American military treated Iraqi prisoners at Abu Ghraib, and one picture of him released Tuesday showed him sitting with most of his upper body exposed except for what looked like strands of an orange shirt torn away.

"The blood of Muslims is being spilled all over the globe and by the will of God, the blood of this parasite will flow in the rivers of blood of Crusaders that will run this blessed year," the statement said. "Muslims in the East and the West, we took a vow upon ourselves to make you victorious and we will not fail. God has unleashed the mujahedeen upon the Crusaders."

Within hours of Mr. Johnson's kidnapping last Saturday, another American, Kenneth Scroggs, was shot and killed outside his Riyadh home. Mr. Scroggs was the business development manager for Advanced Electronics, a Saudi company with several contracts to manufacture elements for electronic warfare systems.

Mr. Johnson worked in Saudi Arabia for the past decade in cooperation with Lockheed Martin on the Apache helicopter. A spokesman for the company in the United States said that it was up to the State Department and not Lockheed Martin to respond to the specific demands on the tape, but that the company and its employees sought to extend their concerns and their prayers to the family. Mr. Johnson's family could not be immediately reached for their reaction.

It seemed unlikely that either the Saudi or the American government would broach negotiations with a terrorist group affiliated with Al Qaeda. "It shows the cruel and inhumane face of the enemy we're dealing with," Adel al-Jubeir, a foreign policy adviser to Crown Prince Abdullah, said on CNN, which first broadcast the tape from the Web site.

The prince, the kingdom's de facto ruler, had vowed earlier Tuesday to step up the kingdom's fight against the terrorists to protect the millions of expatriates, including tens of thousands of Westerners, living there. Attacks since May 1 have killed 29 foreigners, including three gunned down in Riyadh in separate incidents last week. A BBC cameramen was shot dead and a correspondent critically wounded while filming in the poor Riyadh neighborhood that is home to many of the militants, including Mr. Muqrin.

"Be assured that the kingdom has enough men whom you haven't seen so far, but within the coming few days you will see them," Prince Abdullah warned the militants in televised remarks on Tuesday.

The tape the group released showed a high level of technical sophistication typical of its messages. Saudi security officers said that in raiding the group's hideouts they always find a certain duplication of organization - three media centers, for example, instead of just one.

'Islamic website' showing video of kidnapped Americans is registered to a Dallas, Texas address (JackBlood.com) "Statements posted on an 'Islamist website,' by individuals with alleged ties to Al-CIA-duh leader and former CIA protégé Osama bin Laden, claimed responsibility for the kidnapping of Paul M. Johnson, a U.S. contractor in Saudi Arabia... JackBlood.com conducted a domain name search for the website www.ansarnet.ws and the following results pointed out to an address in Dallas, Texas."

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