SANAA - The American embassy in Yemen reopened on Tuesday after a raid near Sanaa that killed two al Qaeda militants addressed specific security concerns that had forced U.S. and European missions to close, the embassy said.

Violence flared in the Yemen-Saudi border area, where Shi'ite rebels waging a revolt against the central government said a barrage of Saudi air strikes on a market had flattened shops and homes, killing two people and wounding three more.

Yemen, the poorest Arab country, was thrust into the foreground of the U.S.-led war against Islamist militants after a Yemen-based wing of al Qaeda said it was behind a Christmas Day bomb attempt on a U.S.-bound plane.

U.S. Secretary of State Hillary Clinton has said fighting in Yemen was a threat to regional and global stability.

Successful counter-terrorism operations conducted by Government of Yemen security forces January 4 north of the capital have addressed a specific area of concern, and have contributed to the embassy's decision to resume operations, the U.S. embassy said in a statement.

It said the embassy, a fortified structure with big concrete slabs to guard against attacks, reopened after a two-day closure prompted by credible information pointing to the likelihood of imminent terrorist attacks in the Yemeni capital, Sanaa.

Placed strategically on the Arabian Peninsula's southern rim, Yemen is trying to fight a threat from resurgent al Qaeda fighters while a Shi'ite revolt rages in the north and separatist sentiment simmers in the south.

The West and Saudi Arabia fear al Qaeda will take advantage of Yemen's instability to spread its operations to the neighbouring kingdom, the world's biggest oil exporter, and beyond. Yemen itself produces a small amount of oil.

The British and French embassies also resumed operations on Tuesday but remained closed to the public, diplomats at those missions said.
THREAT OF ATTACKS

Yemeni forces killed at least two al Qaeda militants on Monday they said were behind the threat that forced the foreign embassies to close, and President Ali Abdullah Saleh said Yemen was ready to confront and defeat anyone thinking of harming the country and its security.

Yemen, with shrinking oil reserves, a water crisis and fast-growing population, had already stepped up security on its coastline to block entry to militants from reaching its shores from Somalia, and said it was closely monitoring al Qaeda militants in two provinces.

Nevertheless, the threat of terrorist attacks against American interests remains high and the embassy continues to urge its citizens in Yemen to be vigilant and take prudent security measures, the U.S. mission said.

U.S. President Barack Obama has asked for as much as $63 million (39 million pounds) in aid for Yemen in 2010 -- up from about $40 million in 2009, the State Department said. Yemen also received an additional $67 million in special funds earmarked to support its counterterrorism and border control efforts in 2009.

Violence flared in the north of the country on Monday, where Shi'ite rebels said on their website that a flurry of Saudi air strikes killed two people near the Saudi border, bringing the toll in three days of violence there to 18.

Shi'ite rebels from the Zaidi sect in northern Yemen have fought government troops since 2004, complaining of social, economic and religious marginalisation.

The conflict, which has killed hundreds and displaced tens of thousands, drew in Saudi Arabia in November when rebels made a cross-border incursion into the world's biggest oil exporter.

Yemeni forces also struck targets in the Saada region on Monday, pounding it with rockets and mortar fire, the Shi'ite rebels said.
Civil war and lawlessness have turned Yemen into an alternative base for al Qaeda, which U.S. officials say has been largely pushed out of Afghanistan and is under military pressure from the Pakistani army in bordering tribal areas.

Al Qaeda in the Arabian Peninsula (AQAP), based in Yemen, claimed responsibility for the attempted Christmas Day bombing of a Delta Airlines plane as it approached Detroit on a flight from Amsterdam with almost 300 people on board.

Yemen has been a long-standing base of support for al Qaeda. Militants bombed the Navy warship USS Cole in the Yemeni port of Aden in 2000, killing 17 U.S. sailors. And Yemenis were one of the largest groups to train in al Qaeda's camps in Afghanistan before the September 11 attacks in 2001.

(Reporting by Mohamed Sudam in Sanaa and Cynthia Johnston in Dubai; Writing by Cynthia Johnston; editing by Thomas Atkins/Peter Millership)

Somalia Hillary Clinton Barack obama Terrorism