A Saudi policeman was killed in a gunfight with "terrorists" in a town populated by minority Shia in the east of the kingdom, the interior ministry said.
Three other policemen as well as a Saudi and a foreign resident were wounded in the incident on Sunday in Awamiya, according to a ministry statement published by the official SPA news agency.
It did not identify the foreigner.
The shootout erupted when police forces launched a raid on several hideouts in the town based on "evidence they were being used by terrorists," it said.
During the search, they came under fire from a nearby building. The police responded and arrested four Saudis suspected of involvement.
They seized automatic weapons, ammunition, and communication devices, the ministry said.
Awamiya, just west of Dammam city on the Gulf coast, has been the scene of clashes between security forces and protesters from Saudi Arabia's Shiite Muslim minority.
Protests erupted in Eastern Province in February 2011 after an outbreak of violence between Shiite pilgrims and religious police in the Muslim holy city of Medina in western Saudi Arabia.
Most Saudi Shia live in the oil-rich east, and many complain of marginalisation.
Sunni-ruled Saudi Arabia accuses its regional rival Iran of exploiting the Shia to incite unrest.