SUMMARY Because of the well known, poor reliability and cost ineffectiveness of the traditional discipline-oriented type of long/ short case clinical examination, the College of Medicine of the Arabian Gulf University in 1996 replaced this type of examination for its final MD Graduating Class by a performance-based clinical examination'The Integrated Direct Observation Clinical Encounter Examination' (IDOCEE) in which the student's clinical competence is tested during his encounter with four or five real patients having a mix of clinical problems under direct observation by a panel of between four and six examiners from different disciplines, over a 2 hour period. Seventy four students were examined by 26 examiners. In order to test the students' and examiners'satisfaction with this type of examination, a structured questionnaire was used.The response was as follows: 98% of the students were satisfied by the examination structure and organization, 94% with its effectiveness in testing student clinical competence, and 97% with the examiner's attitude and approach; 96% of the examiners expressed satisfaction with the examination structure and organization and 97% with its ability to test clinical competence.This experience indicates that the IDOCEE is a practical and cost-effective assessment tool of student's clinical competence, and it can replace the traditional discipline-based clinical examinations.