Yemen announces Eid ceasefire but fighting goes on

SANAA (Reuters) - Yemen's government and northern rebels accused each other on Saturday of breaking a ceasefire during the Muslim holiday of Eid al-Fitr in a war that has killed dozens this week.

"They have not adhered to the ceasefire, continuing attacks against the armed forces in Malahidh, Sufyan and Baqem," a military spokesman said in a statement after Yemen announced earlier a unilateral halt in fighting.

The Eid al-Fitr, which marks the end of the fasting month of Ramadan, is expected to start on Sunday and last for three days. A government statement had said the ceasefire would start on Saturday.

Instability in Yemen, which includes a revived campaign against foreign and government targets by al Qaeda over the past two years, has alarmed Western powers and neighboring Saudi Arabia, one of the world's biggest oil producers.

The rebels said the army had continued to attack.

"The authorities continued their attacks in several areas of conflict despite their ceasefire announcement," a statement from the insurgents said, accusing the army of rocket and artillery fire on Saturday morning in the Sufyan area.

The rebel's website published images of what appeared to be children among 87 people who died in an air raid at a makeshift camp for displaced persons in Saada province on Wednesday, two days after the army bombed a market in the town of al-Talh.

The incidents met with widespread condemnation from aid organizations and Yemeni rights groups. The United Nations top human rights official called on the Yemeni government to meet its obligations to civilians.

Ali Salem al-Beidh, the leader of the former south Yemen republic -- exiled after a war with President Ali Abdullah Saleh's forces in 1994 -- told a gathering of southern separatists that Saleh's government had committed a war crime.

Hassan Nasrallah, leader of Lebanese Shi'ite group Hezbollah, called on Saleh to bring the war to an end during a televised speech on Friday evening -- the latest Shi'ite figure to do so after calls from Iraqi and Iranian politicians.

"Open the door to a political solution. You have the ability to do that and you can take the initiative," he said.

A government statement thanked Nasrallah but said the rebels' actions had left it no choice but to impose order.

The government in Sanaa says the rebels, referred to as Houthis after their clan leaders, want to restore a Shi'ite state that fell in the 1960s and accuse Shi'ite power Iran of maintaining contacts with them.

The rebels say they want autonomy and accuse Saleh of despotism and corruption in a drive to stay in power, as well as introducing Sunni fundamentalism via his alliance with Riyadh.

U.N. aid agencies say around 150,000 people have been made refugees since the fighting first began in 2004. They launched an appeal in Geneva last month for $23.5 million to help Yemen. Thousands are staying in tented camps in mountainous territory.

Media have had difficulty accessing the conflict zone and verifying conflicting reports from each side.

(Additional report and writing by Andrew Hammond; Editing by Sophie Hares/Mike Peacock)