THE US embassy in Yemen reopened yesterday after a raid near Sanaa that killed two al- Qaeda militants and dealt with the security concerns that had led US and European missions to close, the embassy said.

Violence flared near the Yemen-Saudi border, where Shiite rebels waging a revolt against the central government said a series 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 US-led war against Islamist militants after a Yemen-based al-Qaeda wing said it was behind a Christmas Day bomb attempt on a US- bound plane. US Secretary of State Hillary Clinton has said fighting in Yemen is a threat to regional and global stability.

The US embassy said that "successful counterterrorism operations" undertaken by Yemeni government security forces north of Sanaa on Monday had "addressed a specific area of concern and contributed to the decision to resume operations".

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 capital".

Yemen, with a strategic location on the Arabian Peninsula's southern rim, is trying to fight a threat from resurgent al- Qaeda, as a Shiite revolt rages in the north and separatist sentiment simmers in the south.

The British and French embassies also resumed operations yesterday .

US President Barack Obama had asked for as much as 63m in aid for Yemen this year, up from about 40m last year, the US state department said. Yemen also received 67m in special funds last year to support its counterterrorism and border control efforts.

US senator Joe Lieberman, who visited Yemen in August, said an American working in Yemen told him "Iraq was yesterday's war. Afghanistan is today's war and if we do not act pre-emptively now, Yemen will be tomorrow's war."

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

Yemen, with its strategic location on the Arab Peninsula's southern rim, is fighting off al-Qaeda advances