File photo shows Saudi security personnel patrolling near the capital, Riyadh. PHOTO: AFP
The officers came under heavy fire on Saturday morning while looking for suspects hiding among abandoned homes slated for redevelopment in the Almosara area of Awamiya, on the Gulf coast, the ministry said in a statement.
Police "responded as necessary," wounding the suspect Waleed Talal Ali, aged about 18, who died in hospital, it said.
Awamiya, a town of 30,000 in the Shia-majority Qatif district, was the home of Nimr al-Nimr, a Shia cleric put to death in January last year for "terrorism".
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Nimr was a driving force behind protests by Shia residents that began in 2011 and developed into a call for equality in the Sunni-majority kingdom.
Awamiya has seen repeated security incidents in recent years.
Ali was among a group of nine wanted suspects, the interior ministry said, adding that the derelict homes in Almosara had been used for planning "terrorist activities".
A local resident said people have been living for more than a month in Almosara resisting the redevelopment effort.
They have no water, and their electricity comes only from generators, the resident said, asking for anonymity because "the situation is getting worse".
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Residents want to be given new houses and the area kept as a historical district.
But the government has cut dialogue with the Shia community on this and other issues, the resident said, calling for efforts to build trust between the two sides.
A witness on Saturday said he heard a sound like a "bomb" and then saw smoke rising over the area.
The ministry said police had acted in the interest of citizens' safety "and to protect development projects in Awamiya".
The violence on Saturday was only the latest recently in Qatif.
On Thursday a "terrorism" suspect was shot dead and a policeman wounded during a firefight in the area.
Two days earlier a policeman had been gunned down as he tried to leave a Qatif police station in his personal car.
Local citizens are "very upset" over the violence, the resident said, adding: "We need to find a solution".
Most of Saudi Arabia's Shiites live in the oil-rich east, where they have long complained of marginalisation.
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