A powerful car bomb exploded early this morning in a housing compound in Riyadh, the capital of Saudi Arabia, killing at least two people and injuring dozens, according to U.S. and Saudi authorities.

Saudi officials described the attack at the Muhaya compound, an area near Riyadh's diplomatic quarter that houses mostly foreigners from Arab countries, as a suicide bombing, and some suggested that it was carried out by Osama bin Laden's al Qaeda network.

The bombing came one day after the United States closed its embassy and two consulates in the oil-rich kingdom because of intelligence indicating that terrorists plotting attacks were moving into an operational phase.

[One American was injured and another was reported missing in the attack, a U.S. diplomat told the Reuters news agency.

"One American registered with us was wounded and hospitalized. We have one unaccounted for," the diplomat said.]

At least 50 people injured in the bombing -- many of them children -- were taken to hospitals throughout Riyadh, according to the Saudi Health Ministry. The casualty count was expected to mount, officials said.

Officials and witnesses quoted by news services said the attack occurred shortly after midnight, when assailants apparently shot their way into the compound and then set off the bomb, possibly in a vehicle filled with explosives.

A senior Saudi official said the compound was guarded by dozens of Saudi soldiers but that the attackers apparently were disguised as security forces and may have duped the guards. "They appeared as if they were going to reinforce the security," the official said in a telephone interview.

The official, who spoke on condition of anonymity, said the attackers also "had people on the ridge outside . . . taking shots at the compound and the guards shooting back. There was then a truck disguised in security forces colors that got into the gates, shot up the gates and detonated."

The attack was reminiscent of three suicide bombings on May 12 in Riyadh that killed 35 people, including the nine bombers, and injured dozens. Those attacks were blamed on al Qaeda, and Saudi officials speculated that al Qaeda activists or sympathizers were responsible for this morning's bombing as well. In an audio tape released one month ago, the Saudi-born bin Laden called for a new wave of attacks against American and Western targets.

"There's no doubt that this is exactly the same method and materials used by al Qaeda last May," the Saudi official said. "We don't know if it's the same people, but who else would do this?"

During the past week, Saudi security forces trying to preempt attacks have been involved in at least two confrontations with suspected militants. On Monday, police reported uncovering a group that they said was plotting attacks during Ramadan, and two suspects blew themselves up Thursday rather than surrender during a police raid in Mecca, the holiest site in Islam.

The bulk of those injured in this morning's bombing may have been Arabs, including Lebanese, Egyptians and Syrians, according to interviews with residents of the area by local media. Although Muhaya was once predominantly occupied by Westerners, now about "95 percent are Arabs -- Jordanians, Lebanese, Palestinians, Egyptians," the Saudi official said.

The official said that about one-quarter of the victims were children. Many of the compound's adult residents were out shopping late at night during the Muslim holy month of Ramadan, when Muslims fast from dawn to dusk, and many go out after dark for an evening feast and shopping.

A Saudi official said the attack may have resulted from "poor reconnaissance," as the bombers could have thought Muhaya housed more Americans and other Westerners.

Saudi media reported extensive damage to homes in Muhaya, with windows shattered for blocks around the compound. Local television aired pictures of fires raging in parts of the compound.

"A huge explosion blew out the windows. I saw a lot of people injured and I believe there were a lot of people dead," Bassem Hirani, a resident of Muhaya, told al-Arabiya, an Arabic-language television network based in Dubai in the United Arab Emirates. Hirani said only a small percentage of the roughly 200 houses in Muhaya were occupied by Westerners.

The bombing occurred just hours after the British Embassy in neighboring Bahrain warned its citizens of possible terrorist attacks against Western targets. "We judge that there is a high threat from terrorism against Western, including British, targets. We are particularly concerned about potential threats to places where Westerners might gather," the embassy said in a statement posted on its Web site.

"You should review your security arrangements carefully. You should remain vigilant, particularly in public places," the statement added.

Bahrain, an island in the Persian Gulf that is linked to Saudi Arabia by a causeway, has long served as the headquarters for the U.S. Navy's 5th Fleet.

Britain did not close its diplomatic missions in Saudi Arabia, but urged its citizens there to be vigilant and "to assess that the threat from terrorism is particularly serious at this time and that terrorists may be in the final phases of planning attacks in the kingdom."

Correspondent Peter Finn in Berlin contributed to this report.

A blast believed to be a suicide bombing gutted a Riyadh compound housing foreigners and Saudis early today, a day after the United States warned of possible terrorist attacks and shut its embassy and missions in Saudi Arabia. Some blamed the attack on al Qaeda.An image taken from al-Arabiya television shows a wounded woman sitting in a Riyadh hospital following a bombing in the Saudi capital.Saudi rescuers search through rubble for casualties after a car bomb gutted a Riyadh compound housing foreigners and Saudis early today. The attack came a day after the United States warned of possible terrorism and shut its embassy and missions in Saudi Arabia.Rescue workers search the rubble following an explosion in a Riyadh housing compound. The attack was reminiscent of three suicide bombings in May.A Saudi policeman steps over bicycles and past the remains of a car as firefighters douse the smoldering ruins of a house devastated in a bombing in Riyadh.