Signed by the country's grand mufti and six other top clerics, it contradicted a push by the government to create new jobs for women, who face high unemployment in the kingdom.
According to figures reported in April, unemployment among Saudi women was 28.4 percent in 2009, up from 26.9 percent in 2008.
"The progressive women are all outraged," said Fawzia al-Bakr, a professor at Riyadh's King Saud University.
"It is not just about a woman working as a cashier... There are more than 60,000 women university graduates looking for jobs, so this is a big thing."
Reem Asaad, a Jeddah economics professor, called the fatwa an attack on efforts like her campaign to create more jobs for women.
"Its an organised war to stop what we are trying to do," she told AFP, adding that "we don't know what will happen now."
Objections also poured in from men and women on the internet.
"Another day, another misogynist fatwa," Eman al-Nafjan wrote on her popular website "Saudiwoman's Weblog."
The fatwa was issued by the Committee on Scholarly Work and Ifta, the official issuer of fatwas, under the Council of Senior Scholars, the top Islamic authority, and signed by Grand Mufti Sheikh Abdul Aziz al-Sheikh and the six other members of the fatwa committee.
"It is not permissible for a woman to work in a place where they mix with men," it said.
"It is necessary to keep away from places where men congregate. Women should look for decent work that does not make it possible for them to attract men or be attracted by men."
It was the committee's first politically significant ruling since King Abdullah issued a decree giving the council sole authority to issue fatwas in August.
The fatwa came months after several supermarkets and clothing stores began hiring women cashiers under the authorisation of the labour ministry.
It appeared to be a challenge to an important government policy, in a country where the Islamic religious establishment carries huge political weight.
"There is some sort of a clash now between the political society and the religious society, a clash over an important issue," said Khalid al-Dakhil, who teaches political sociology at King Saud University.
"The government is now in a very difficult position," he said.
Some questioned the fatwa, which did not cite Koranic literature for support as such rulings usually do.
Like many, it was written in response to a question, published with the ruling, asking specifically if women should work as cashiers in markets.
But uncommonly there was no source of the question given, Asaad said.
Moreover, she said, "the answer to that question has been converted into a fatwa in record speed."
"It's a planned thing... to hinder the progress of women."
Dakhil said he expected the government would try to ignore the ruling.
"This kind of fatwa is not binding to the government... It may slow the process but it will not stop it."
The clerics "don't take into consideration the social and economic reality of society," he said.
A fatwa is not the same as a law passed and promulgated by the government, he added.
Nevertheless, it can be used as law in Saudi Arabia, which holds Islamic sharia law as its legal code. All judges in the country are Islamic clerics schooled in sharia.
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