|Crown Prince Abdullah bin Abdul Aziz al-Saud, who rules Saudi Arabia in place of his ailing half-brother, King Fahd, is sitting under huge crystal chandeliers in a luxurious hall the size of a football pitch, listening to the problems and complaints of his subjects. In the middle of a short queue, a weatherbeaten tribal elder waits patiently. When his turn comes, the tribesman sits in an ornate chair next to the prince and begins pleading for a new well in his village. To my surprise, there is no subservience. Instead, the elderly man wags his finger at the 81-year-old prince, and even appears to be hectoring him.
After a few moments, during which Crown Prince Abdullah listens attentively, the old man hands him a letter confirming his request, squeezes the arm of his ruler and wanders away satisfied. With the air of a man dealing with a demanding family, the prince hands the paper to one of several flunkeys and turns to the next visitor. This uniquely Saudi event is a majlis, at which male Saudis are granted an audience with royalty. This summer, at a palace in the west of the kingdom, I became one of few Westerners permitted to meet the crown prince and to observe this medieval form of consultative rule.
In spite of heightened security after a spate of terrorist attacks in Saudi Arabia, the majlis is a curiously intimate affair. Saudis crowd round their leader for a handshake. Aides say there is no vetting of questions, and any male can drop in for a chat. "Just like one of your MPs' meetings with constituents," a younger prince told me. Not quite. The House of Saud runs every aspect of the kingdom as its private fiefdom. While the majlis proves that the royals listen to their subjects, it also shows how ordinary Saudis' lives can be changed, for better or worse, on a royal whim.
The senior royals, who have run this vast country since the charismatic King Abdul Aziz bin Saud unified Arabia in 1932, have long been vilified by outsiders. Western critics say the royals are corrupt, misogynistic, dictatorial and oppressive - and responsible for fomenting global terrorism. When I spent almost a month travelling around the kingdom, it came as a surprise to discover the extent to which most Saudis support the royals and want them to retain control, at least for now.
Crown Prince Abdullah, a son of King Abdul Aziz, is leading the nation during one of the most turbulent periods in its history. Saudi Arabia is facing unprecedented economic, social and political upheaval, and only major change can prevent the country sliding into chaos. The crown prince leads a reforming wing of the royal family. He has done much to discourage royal extravagance - even forcing the many other princes to pay for their own airline tickets - and is slowly beginning to modernise this devoutly Islamic country. But he must reconcile change with the demands of a pious population that worries that the Islamic focus of the state is under threat, while at the same time challenging the fundamentalists responsible for a wave of bombings and attacks across the kingdom.
Indeed, Saudi Arabia is a land of staggering contradictions. All Saudis profess loathing for the American government, and the suffering of the Palestinians dominates the news. Yet Western shops and foreign fast-food restaurants do brisk business. McDonald's is hugely popular, although every outlet has separate sections for men and women and, like all businesses and shops, they close five times a day for prayers. Alcohol and cinemas are illegal, but video stores stock the latest Hollywood releases. Satellite dishes are officially banned, but most families have one. Public music is prohibited, and firms have been reprimanded for playing music to callers on hold, but English-language graffiti praise American rappers and Eminem blares from car stereos.
The fiery mutawaeen - religious police from the Committee for the Propagation of Virtue and the Prevention of Vice - roam streets, shops and restaurants enforcing their vision of morality. Saudi women are legally prevented from driving and - with scant religious justification - must wear the black abaya, which covers the body from head to toe. Yet women wearing the abaya pore over scraps of underwear in lingerie shops in Riyadh before combing the sprawling new Harvey Nichols department store for fashionable dresses they can wear at private house-parties.
About 70 per cent of the population of the Holy Kingdom are under the age of 30, but all the rulers are over 70. An army of youngsters is simmering with frustrations. There are few outlets for youthful rebellion. Young people are so desperate for contact with the opposite sex that teenagers scribble their names and mobile numbers on bits of paper and throw them at someone they fancy when the mutawaeen aren't looking.
To justify and legitimise its rule over its young subjects, the House of Saud turns to Islam. Since the creation of the state, the House of Saud has partnered with clerics who espouse the strict form of Islam derived from the 250-year-old teachings of a preacher called Muhammad bin Abd al-Wahhab. Mercy and tolerance are hallmarks of Islam, but Wahhabi teaching declares that Muslims who do not adhere to his particular version of Islam are apostates, and thus deserving of death. For decades, strict Wahhabism has taught that Christians and Jews are infidels and heretics. Wahhabi clerics control education in Saudi, and they have raised many youngsters to hate.
School textbooks state that Muslims and non-believers are historical enemies and include sections detailing "ways to show hatred to the infidel". One book explains that Jews and Christians were cursed by Allah "and turned into apes and pigs". Universities focus on religious instruction and eschew vocational skills, leaving many young Saudis ill equipped for the modern world.
Education and militancy are not the only areas where, critics say, the House of Saud has failed. Internal dissent has been stifled. The few human-rights workers not in jail allege that prisoners are tortured and abused.
Even the economy has taken a hammering. Saudi Arabia has 25 per cent of the world's oil reserves, but the average Saudi woman has six children, and state funds have not kept pace with the population boom. Incomes have fallen by about two-thirds since the Eighties, and unemployment is up to 30 per cent. Saudi women and children beg at traffic lights, a sight unthinkable just a few years ago. Meanwhile, more than 4,000 princes live lavishly at state expense, and millions of foreign "guest workers" from Asia, often treated like servants, keep the country running by taking the jobs Saudis are unable or unwilling to do. Foreigners make up a staggering 90 per cent of all employees in the private sector.
But it is wrong to perceive Saudi Arabia as a stagnant, backward state. It has experienced more change in the past 30 years than in the previous 13 centuries. In the space of a few decades it has undergone an industrial revolution, mass immigration, globalisation, a religious backlash and a social revolution brought about by the arrival of Arab satellite television.
Now change is coming again. To save the economy and meet the challenges of the modern world, reformers, including senior members of the royal family, are preparing for democratisation, social liberalisation and economic redistribution. The recent terror attacks have intensified the pressure; reformers argue that giving ordinary Saudis a say in the running of their country will help to marginalise the militants.
Crown Prince Abdullah professes to be committed to reform, saying: "It is high time to rid our society of the seeds of fanaticism and hatred and instead plant the seeds of tolerance and unity." The prince has been holding an unprecedented series of meetings with intellectuals, clerics and reformers, discussing modernisation of the courts, the employment market and the education system. Most radical of all, the country is taking a step towards democracy. Senior princes confirm that municipal elections, the first since the Sixties, will be held in October - and women can vote.
Much of this change is driven by necessity. Young women constitute 55 per cent of university graduates but just 5 per cent of the workforce. "This is a waste of money, a waste of human resources and a waste of brains that could really challenge this economy and get it out from the very low growth of around 1.4 per cent for the whole [of the] last 20 years," says Nahed Tahar, a female senior economist, who graduated in Britain.
Reforms granting women more rights have already been introduced, and laws are being rewritten to encourage women to start businesses and to invest capital. Ten years ago, hardly any women worked in the kingdom. Tahar, who works for an investment bank, is a trailblazer. But men and women still cannot work together, so Tahar has her own office in an open-plan building. "When I started, there were many men who could not look me in the eye," she says. "But now they are getting used to me."
Change happens slowly in Saudi, but royals are among those making a difference. In Jeddah, the entrepreneur Prince Amr bin Muhammad, a grandson of King Faisal, has begun employing women in his IT business. "Some women who are wealthy don't need to work," Prince Amr says. "But there are a vast majority of them who are not wealthy and who need to work."
Prince Amr is creating computerised maps of the kingdom that could one day be used to compile electoral rolls for a constitutional monarchy. Change is needed, he says: "We cannot rule the way we have been doing for the last 100 years. Better we change than have it imposed on us."
I had presumed that most Saudis privately felt oppressed by their royal rulers and wanted rapid reform. But after meeting scores of Saudis - from Bedouin tribesmen to senior princes, from Osama bin Laden's former best friend to trendy young women - I realised I had been wrong. The majority of Saudis regard the royals as the glue that holds their country together. And, while most people accept the need for change, they want it to happen at their own pace, not one dictated by the West.
I expected hostility. But, despite their anger at Western support for Israel and general fury at American foreign policy, Saudis do something many Westerners do not - they make a distinction between an individual and the government of his country. Everywhere I went, the Saudis were warm and hospitable. The shooting of the BBC's Simon Cumbers and Frank Gardner, shortly after I flew home, came as a huge shock.
Yet Saudi Arabia has been a breeding ground for militancy for more than a decade, and Western and Saudi intelligence experts believe there are still several thousand extremists within the kingdom who are prepared to use violence. Many Saudis supported the events of September 11, and a majority at least felt a degree of satisfaction that America was suffering.
But support for extremism has begun to change since the attacks inside Saudi Arabia, which killed local Muslims and Western workers who were guests in the country. Now Saudis see themselves as victims. Concrete barriers have gone up around major buildings, hotels and shopping malls to protect against car bombs. Dr Mohsen al-Awaji, a Saudi lawyer who represents several militants and who was imprisoned for his own militant views, believes the terrorists have gone too far and that their campaign has become "intolerable".
At his office in Riyadh, Dr al-Awaji, a pious but avuncular figure, introduced me to "Saleh", a tough, hardline imam who has fought in Afghanistan and supports Bin Laden, and has been imprisoned for some years because of his links to extremist organisations. Saleh, who said he would have been "proud" to be a September 11 hijacker, was flicking through the translated autobiography of Hillary Clinton, which seemed to reinforce his hatred of the West.
Yet he was embarrassed by the latest terror attacks inside Saudi Arabia, and viewed them as a huge mistake. I heard the same comments across the kingdom. Saudis are turning against the extremists they once supported. Even the clerics Safar bin Abdul Rahman al-Hawali and Salman al-Awdah, once so close to Osama bin Laden that he thanked them personally in videotapes for their support and for "enlightening" Muslim youth, now describe the militants as "deviants".
This change is vitally important. Saudi Arabia is the focus of the Islamic world. About 1.3 billion Muslims around the planet face towards the kingdom in prayer five times each day. If the people of the holy kingdom turn aggressively against al-Qa'ida, latent sympathy for extremism across the rest of the Islamic world could also start to wane. The next few years will be crucial. The royals must introduce changes that modernise the kingdom, treading a path between the demands of the reformers and those of the hardliners, while moving at a pace the cautious Saudis will accept. The stakes are huge. Success or failure will shape the future of Islam across the world, and could have a profound impact on all our lives.
Simon Reeve presents 'Saudi: The Family in Crisis', a 'This World' documentary, on BBC2 tomorrow night at 9pm. He is the author of 'The New Jackals: Ramzi Yousef, Osama bin Laden and the future of terrorism' (Andre Deutsch)