DUBAI, United Arab Emirates (AP) — Saudi Arabia is demolishing centuries-old homes in a Shiite town, leveling a historic district that officials say has become a hideout for local militants.

The destruction has sparked shootouts in the streets between Saudi security forces and Shiite gunmen and stoked sectarian tensions that resonate around the region.

The violence in the Shiite town of al-Awamiya, which is centered in the Sunni kingdom’s oil-rich east coast, adds a new source of instability at a time of increasing confrontation in the Gulf.

Tensions between Saudi Arabia and its Shiite-led rival Iran have spiked in recent weeks. Also, Saudi Arabia and its allies severed ties with neighboring Qatar, demanding among other things that it cut off ties with Iran.