Tuesday’s gun attack took place at this gas station in Riyadh, Saudi Arabia’s capital. (Fayez Nureldine/Agence France-Presse via Getty Images)

A gunman in Saudi Arabia opened fire Tuesday on three American defense contractors, killing one and wounding another before being arrested after a shootout with police, U.S. and Saudi officials said.

The Saudi Interior Ministry named the suspect as Abdulaziz Fahad Abdulaziz Alrashid, 24, a dual U.S.-Saudi citizen born in Washington state.

Despite initial fears that the incident might have been terrorism related, the ministry statement indicated that the shooting stemmed from a workplace dispute.

All involved worked for Vinnell Arabia, a U.S.-based contractor involved for the past 40 years with training Saudi Arabia’s national guard. The Interior Ministry said that Alrashid “was recently dismissed from his job due to drug-related issues.”

The identities of the victims were not immediately released. The wounded man was being treated at a local hospital, according to Saudi media reports. The third man was not injured, the Saudis said.

U.S. State Department spokeswoman Jen Psaki said the shooting occurred at a gas station about a half-mile from the Riyadh base of Vinnell Arabia.“We are in close contact with the Saudi government as we continue to gather details about the shooting and motive,” Psaki said

She said U.S. officials were evaluating the “security posture” for diplomats and others in Saudi Arabia but gave no details on any possible changes.

Vinnell is a joint venture of Northrop Grumman. A spokesman for Northrop said Vinnell is working with Saudi authorities and the State Department on the matter.

Saudi Arabia faced a wave of attacks blamed on al-Qaeda-inspired cells nearly a decade ago, but a wide-ranging clampdown by security forces has sharply reduced the violence in recent years.

In 2003, nine Vinnell employees — seven Americans and two from the Philippines — were killed when a suicide bomber detonated a huge blast near a building used to house Vinnell staffers. In 1995, a car bomb in Riyadh destroyed a building housing a Vinnell-affiliated military training program, killing five Americans and two Indians.

Vinnell was awarded its first training contract in Saudi Arabia in the mid-1970s. The work was greatly expanded after the U.S.-led war in 1991 to drive Iraqi forces from Western ally Kuwait.

Saudi Arabia is a key Arab backer of the U.S.-led effort to fight Islamic State militants in Iraq and Syria.

Carol Morello in Paris and Missy Ryan in Washington contributed to this report.