Dramatic footage has emerged showing police officers and ISIS terrorists engaged in a shootout in Saudi Arabia.

The street battle began at around dawn, in the Jasmine district towards the north of the Saudi capital, Riyadh.

Security agencies obtained information that there was a gang preparing explosives, and launched a daring raid.

A video taken from a bedroom window shows the terrorists, armed with machine guns, approaching the police car

But the suspects inside refused to surrender and a gunfight ensued, as shocked citizens watched on from their homes.

The terrorists, who were strapped with suicide belts, are believed to have taken a prisoner hostage in the incident.

Those who were out in the street when the shootout started were ushered to safety into a nearby mosque.

A video taken from a bedroom window shows the terrorists, armed with machine guns, approaching the police car.

They get right up to the vehicle, but as they do, one of the police officers manages to shoot them at point blank range with a pistol

In the background, a woman can be heard crying hysterically as she watches the drama unfold

In the background, a woman can be heard crying hysterically as she watches the drama unfold.

They get right up to the vehicle, but as they do, one of the police officers manages to shoot them at point blank range with a pistol.

The hero police officer is currently in hospital recovering from his injuries.

The hero police officer is currently in hospital recovering from his injuries following the shootout