KARACHI (AFP) – A Saudi diplomat was killed in a hail of bullets on his way to the country's consulate in Karachi on Monday, the second attack on Saudi interests in Pakistan's biggest city in less than a week.

The Pakistani Taliban denied carrying out the assassination and authorities said they were investigating possible links to sectarian groups or the death of Saudi-born Osama bin Laden, who was killed by US Navy SEALs on May 2.

Saudi Arabia said the victim, Hasan al-Khatani, was travelling to work when he was killed and demanded that Pakistan tighten security measures for its diplomats, following a grenade attack on the mission building last week.

Police said Khatani worked in the consulate's security department and was driving a vehicle with diplomatic plates when two motorcycle riders unleashed a stream of gunfire at a crossroads in the city's upmarket Defence neighbourhood.

Karachi city police chief Iqbal Mahmood said militants fired four rounds, killing him at the scene, and fled on their motorcycle.

"They came on a motorbike, they fired four shots. One bullet hit his head and he died on the spot," he told reporters.

Prime Minister Yousuf Raza Gilani, who Monday held talks with US Senator John Kerry designed to repair ties damaged by the unilateral American raid that killed bin Laden in the city of Abbottabad, condemned the attack.

The killing further embarrasses a country still in shock that the world's most-wanted man may have lived undetected for years two hours' drive from the capital, and Pakistan said it would take all measures to protect diplomats.

"We are investigating if it was linked to the Abbottabad operation or was an isolated incident," said provincial home ministry official Sharfuddin Memon, calling the dead man a junior officer at the consulate.

A six-member police and intelligence team would investigate both attacks on the Saudi mission, whether they are connected and who was responsible, he said.

Last Wednesday, assailants on a motorbike threw two grenades at the consulate in what officials said could have been reaction to bin Laden's death.

The Pakistani Taliban, blamed for some of the worst acts of violence in the country, last Friday claimed a double suicide bombing that killed 89 people outside a police training centre as their first revenge for bin Laden.

But spokesman Ehsanullah Ehsan said in a telephone call to AFP: "We are not claiming the attack in which a Saudi diplomat was killed.

"We support the action but we are not afraid. Had we done it, we would have claimed it," he added.

Karachi has been awash with political violence, crime and sectarian killings. There is a large Shiite minority in the predominantly Sunni Muslim city, where a variety of hardline extremist groups are thought to operate.

"Apart from a possible reaction by militants to bin Laden's killing, we also suspect a sectarian link," one senior security official told AFP.

Sunni-majority Saudi Arabia condemned the attack as "criminal" and called on Pakistan to tighten security measures around diplomatic missions, a foreign ministry official was quoted as saying by state media.

Last week, Saudi Arabia condemned the grenade assault as a "terror attack", saying it had "full confidence" in Pakistan's ability to bring the assailants to justice and provide the necessary protection to the Saudi mission.

Islamabad said Pakistan's junior foreign minister Hina Rabbani spoke to Saudi Foreign Minister Prince Saud al-Faisal to express "shock and anger" over the killing and pledged the perpetrators would be brought to justice.

"The government of Pakistan will take all necessary measures to ensure the security and protection of diplomats in Pakistan," the foreign ministry said.

Saudi Arabia expelled bin Laden in 1991 and later revoked his nationality. The government in Riyadh, which is allied to the authorities in Islamabad, last week welcomed his killing as a boost to international anti-terror efforts.

Pakistan is holding in protective custody three of bin Laden's widows, who come from Saudi Arabia and Yemen, and 13 of their children.