Riyadh, the bustling and ultramodern capital of Saudi Arabia, was little more than a quiet outpost until the mid-20th century. Like most developments in this wealthiest of Arab nations, the city?s dramatic transformation was financed by the oil industry.

Saudi Arabia?s vast natural oil reserves, one quarter of the world?s total, have enabled it to develop exemplary health and welfare systems, free education, a modern well-equipped military force, and an infrastructure that includes an excellent road system. But in terms of social developments, the oil wealth has had little impact. Saudi Arabia has remained a tribal society, ruled by a royal family with seemingly complete power over its people.

?I think one problem with Saudi Arabia is, like many countries, it doesn?t have one Saudi Arabia,? says Anthony Cordesman, a Middle East analyst at the Center for Strategic and International studies and author of a new book titled Saudi Arabia Enters the 21st Century.

?If you go to the area along the Gulf Coast where the oil industry is concentrated, it?s very modern and people there have more exposure to other states in the west. It is perhaps more liberal,? says Mr. Cordesman. ?The area around Riyadh and most of the internal areas in Saudi Arabia are less exposed to the West and more conservative.?

Saudi Arabia?s role as the keeper of the Muslim holy cities Mecca and Madina has compelled many Saudis to adhere strictly to social and religious mores and serve as model to 1.3 billion Muslims worldwide. Anthony Cordesman says it is an intensely conservative, puritanical Islamic country: ?It is a country of tribes and extended families. It is still a nation of people who do not have, in broad terms, good contact with either the West or indeed, to the extent that other Arab countries do, the Middle East as a whole.?

Since 1932 when Saudi Arabia was founded, it has been ruled by one clan, the Saud family. At the turn of the 20th century Abdul Aziz Ibn Saud, supported by the clan of religious reformer Muhammad al-Wahab, wrested the power from Al Rasheeds.

The discovery of oil in the early 1930?s led to the 1970?s oil boom. High oil revenues enable many Arabs to live in luxury that rivals or surpasses the west. This in turn has lured some six million foreign workers to perform highly skilled jobs as well as menial labor. Walter Cutler, former U-S ambassador to Saudi Arabia, says this western influence outrages traditionalists: ?I think one of the sources of unhappiness among these people is that, look, when you have this vast oil income and you develop your country, what has happened is you have a lot of western technology and a lot of westerners coming in to help develop the country. In other words, you have a very large foreign presence there.?

So during the 1970-s when the country enjoyed bountiful oil revenues, King Faisal was killed and armed opponents of the royal family temporarily seized the holy city of Mecca. Corruption, oppression and foreign influence were among the chief complaints against the ruling elite. The royal family tended to attribute acts of discontent to foreign groups. But the recent bombing of a residential complex in Riyadh, where many Muslims lived, shocked the royal family into realizing there is home-grown terrorism.

Many analysts say the chief cause of Arab discontent is economic as well as political. There is growing unemployment as oil revenues decline. Like most Arab countries, Saudi Arabia has a population boom. An average Saudi woman bears more than six children. The population has quadrupled in the past three decades with more than half under age 20. Joseph Kechichian, author of several books on the Middle East, including Succession in Saudi Arabia, says a growing number of young men are educated in Islamic theology, culture and history but not in the skills needed for today?s technological industry. ?So therefore, you have a pool of unemployed young men, religiously educated and well motivated, some of whom have military training because they?ve served at one point or another in the armed forces, who are venting their frustrations against the establishment,? says Mr. Kechichian. ?And the establishment are not only the ruling family, but the large business holders, the established religious scholars, who have accepted the al-Saud as their rulers.? Joseph Kechichian says these idle and increasingly destitute youths are targeted by recruiters for terrorist organizations such as Al-Qaida. But many of these young men who grew up with MTV and Internet, also want a more open and democratic society.

Under pressure to change, the royal family has begun planning political and economic reforms. Walter Cutler, who remains a frequent visitor to Saudi Arabia, says changes are coming: ?What I?ve noticed in my last couple of times there during the last two years is a greater openness in dialogue. Here I am talking about the media in particular. There is discussion of social issues that one would not have expected to find in the media when I was there in the 1980-s.?

Earlier this month, the kingdom announced it plans weekly broadcasts of its Majlis Ash Shura, the sessions of the national consultative council established in 1992. Although the Shura members are appointed by the King, some observers regard the council as a forerunner of an elected legislature that may one day share power with the monarchy. But no one is sure when that day may come. Both the royal family and its allies fear free elections in Saudi Arabia could usher in a Taliban-like regime.

?It is anything but clear that if the Saudi monarchy should fall, the technocrats and the business class would not fall with them,? says Anthony Cordesman, ?or that you would get anything other than an Islamic conservative country, which would be far less able to deal with the economic and demographic problems that Saudi Arabia faces.?

One-hundred-twenty members of the consultative council make up one of the most educated assemblies in the world. More than half hold doctorate degrees and close to three-quarter are graduates of major Western universities. Only a dozen hold degrees in religious studies, which is typical in the rest of the society. But the group does not represent the nation?s diverse society, including women, young people, rural elements and the one third of the population that is still illiterate.

Some analysts blame the Saudi leadership for moving too slowly on reforms. Anthony Cordesman does not agree: ?Part of the reason it is so slow is this is not a country where a conservative monarchy sort of sits on a progressive people? he says. ?Since the time of Ibn Saud, it has usually been a country where the monarchy, the technocrats and the business class move a very conservative people forward as fast as those people wish to move.?

Mounting protests, not to mention bombings indicate Saudis are eager for change. But what kind of change? A lack of polls, focus groups and political research makes it hard to gauge whether the majority want to revert to a more conservative and closed Islamic society or a democratic one open to the rest of the world. In these circumstances, say analysts, gradual reforms are more prudent than a rapid change that leads to violence.