Yemen rebels say Saudi troops fired on border town
(Adds southern protests in paragraphs 7-9)
SANAA, Oct 19 (Reuters) - Shi'ite rebels in Yemen accused forces from neighbouring Saudi Arabia on Monday of firing into a northern border town in support of the Yemeni government's offensive against them.
The insurgents, who say they are fighting political, economic and religious marginalisation, have often accused Sunni power Saudi Arabia of fighting on the side of Yemeni President Ali Abdullah Saleh.
"The Saudi forces near the Hasama border region hit the Hasama market with heavy machinegun fire while the market was full of people," the rebels, known as Houthis after their clan leaders, said in a statement.
"This reveals the increasing Saudi interference in Yemen's internal affairs," it said.
A security official denied that Saudi forces had fired on Hasama and said Saudi Arabia had no role in the war.
Saudi Arabia, the world's biggest oil producer, and the United States fear the conflict in Yemen's northern provinces and a separatist movement in the south will enable al Qaeda to establish a stronger foothold in the Arabian Peninsula state.
Hundreds of supporters of the opposition Southern Movement protested in the city of Dalea on Monday against the detention of activists after clashes this year with security forces during separatist protests.
Marchers also condemned the suspension of al-Ayyam newspaper, accused by authorities of supporting secessionists.
Witnesses and opposition and independent news websites said police did not intervene and the protest ended without incident.
In an interview with Saudi-owned MBC television aired on Sunday, Saleh said Saudi Arabia backed Yemeni unity but did not interfere.
He vowed to crush the rebels, who he said last week would be defeated within days, and accused al Qaeda, a Sunni group, of backing the Houthis.
"From the reports we have, they back each other. The Houthis support al Qaeda and al Qaeda support the Houthis," he said.
Yemeni and Saudi al Qaeda militants said this year they had joined forces. Al Qaeda-linked militants have stepped up attacks on government and foreign targets in Yemen since 2007.
Yemen sees Iran's hand behind the rebellion, an accusation Tehran denies. Iran and the Shi'ite group Hezbollah in Lebanon have called on Saleh to end the fighting through talks. The army launched Operation Scorched Earth to crush the rebels in August.
About 85 people were killed in an army raid on an improvised refugee camp last month. Aid groups say about 250,000 people have been displaced by the fighting, which broke out in 2004. (Reporting by Mohamed Ghobari; Writing by Andrew Hammond)
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