However, many users also expressed resentment that Canadian smart phone manufacturer Research in Motion Ltd. (RIM) was unwilling to grant the Communications and Information Technology Commission (CITC) the same data access that is given to Western governments without a standoff.

The CITC, meanwhile, has given a 48-hour deadline to RIM to comply with its regulations. "Considering the efforts made by mobile phone service providers toward meeting CITC's organizational requirements and fulfilling license conditions, we have given them an additional grace period of 48 hours, which ends on Monday, in order to test the proposed solutions," the regulator said.

The CITC said the decision on whether or not to ban BlackBerry messenger would be taken on the basis of the results reached by service providers.

Earlier, The Associated Press and the Agence France-Presse quoted Saudi regulatory and telecom officials as saying that the two sides have reached a deal on accessing BlackBerry users' data that will avert a ban on the phone's hugely popular messenger service.

CITC official Bandar Al-Mohammed told The Associated Press that RIM expressed its "intention ... to place a server inside Saudi Arabia."

The agencies reported that tests are now under way to determine how to install a BlackBerry server inside the country.

"A deal has been virtually reached, and we are in the process of adding the final touches," confirmed another news agency, quoting an official at one of the Kingdom's three licensed mobile operators.

The Kingdom is among a number of countries expressing concern that the device is a security threat because encrypted information sent on the phones is routed through overseas computers - making it impossible for local governments to monitor.

On Tuesday, CITC announced the ban on BlackBerry, saying the service "in its present state does not meet regulatory requirements."

Earlier Saturday, an official of one of the three telecom companies reported progress in talks with RIM, in a bid to have the device conform with Saudi laws. "A solution is in sight with the Canadian company," the official said.

BlackBerry's encrypted e-mails and data are stored on servers in Canada, where RIM is based, meaning that third parties, such as intelligence agencies, cannot monitor the secure communications.

Young Saudis reacted with delight at the deal and were furiously sharing the news with their friends via BlackBerry Messenger Service and Facebook.

"Good news, it is on," wrote Muhammad T. Al-Shehri on his Facebook. His friends wrote dozens of comments on his wall appreciating the decision. Some of them, however, castigated the Canadian manufacturers for its brinkmanship.

"Why take things this far? It (RIM) should have agreed to do what it has agreed now. I don't like this game of chicken. The whole thing was about who is going to blink first," wrote Hudhaifa Aziz. "We were told all this while that our government was asking for something that was not possible for RIM to accede to. Well, that was all wrong; our government was right."

Sumaira Farooqui, a young Indian expat and an avid user of BlackBerry, said she was convinced all along that the service would not be banned. "We read reports in newspapers abroad that RIM was sharing information with other governments in the Western world, especially the US and the UK. Its refusal to grant access to Muslim governments was a classic case of double standards. I am happy Saudi Arabia called RIM's bluff," she told Arab News from Yanbu.

For now, it appears the issue has lost its grip on the Kingdom, which will allow users to grip their BlackBerries and resume text messaging.