BlackBerry users in Saudi Arabia were left guessing for a second time in a week on Tuesday after a deadline to address security concerns about encryption lapsed, but service continued normally.

However, manufacturer Research In Motion (RIM) did receive good news from smaller Oman that it does not plan to block BlackBerry services, citing a philosophy of free market in the sector.

The telecom watchdog in Saudi Arabia, the Communications and Information Telecommunications Commission (CITC), on Saturday gave the kingdom's three mobile companies until Monday before it cut BlackBerry's Messenger function.

More than one hour into Tuesday in Saudi Arabia, BlackBerry services -- including the Messenger function -- appeared to be working normally, but CITC had not issued any statement.

Saturday's ultimatum by CITC was the second in a week. It threatened to cut the popular function for some 700,000 users in the kingdom on Friday, but allowed it to continue as talks with RIM and Saudi carriers started making some headway.

The 48-hour reprieve, according to CITC, should have given the three Saudi carriers and RIM the time to test proposed solutions to meet the regulatory requirements. The CITC did not say what these were.

A CITC official said on Sunday the Canadian manufacturer and Saudi mobile companies were testing three servers through which data and communications coming in and out of Saudi Arabia would transit in addition to RIM's servers in Canada.

About four hours before the deadline, CITC Governor Abdularahmane al-Jaafari told Reuters: We will issue a statement before the deadline.

He declined to elaborate.

A source at one of the three telecom companies said they have yet to hear from CITC.

CITC is not alone in this. There is also the telecom ministry, the interior ministry etc, the source said.

Another Saudi industry source said: I'm not even sure CITC would publicly disclose the details of any set-up agreed upon with RIM or even allow the mobile carriers to talk about it.

Citing unidentified sources, Al-Hayat newspaper reported the CITC has obtained the regulatory requirements it was seeking.

A deal in Saudi Arabia would be the first in the region for RIM, which has come under scrutiny from other countries, including India, United Arab Emirates, Lebanon and Algeria, regarding its encrypted network, which governments want monitored to avert possible threats to national security.

Saudi Arabia is RIM's biggest Middle East market, but accounts for less than 2 percent its global customers. The handset has been hit mainly among Saudi youths as it allowed them to interact with members of the opposite sex in the deeply conservative society.

But political activists in the Gulf region say BlackBerry's messaging service also boosted their ranks and are now on the hunt for new ways to evade authorities.

Kuwait said it has no intention of stopping BlackBerry services for the time being, but is talking to RIM about moral and security concerns, Communications Minister Mohammad al-Busairi said.

(Additional reporting by Firouz Sedarat and Erika Solomon in Dubai, Frederik Richter in Manama; editing by Andre Grenon)

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