Yemen rebels say open to Saudi prisoner swap

Saudi soldiers walk near the Khoba frontline border with Yemen, January 27, 2010.

SANAA (Reuters) - Yemen's northern Shi'ite rebels said on Tuesday they were open to a prisoner swap with neighboring Saudi Arabia if Riyadh was committed to peace, but said the kingdom had carried out more air strikes against them.

Saudi Arabia declared victory over the rebels last week. Three months ago it was drawn into the conflict between the Yemeni government and the insurgents, who complain of social, religious and economic discrimination.

The rebels would have to return six missing Saudi soldiers if they wanted hostilities to end, Saudi Assistant Minister of Defense Prince Khaled bin Sultan said at the time. Prince Khaled told state media on Tuesday the body of one missing soldier had been found.

"The issue of the Saudi prisoners is not an obstacle if there is a will for peace. Perhaps the matter can be solved through a prisoner swap," the rebels said on their website.

Yemen, which is also pursuing a crackdown on al Qaeda and struggling to contain a southern secessionist movement, rejected on Sunday a ceasefire offer from the rebels, saying it did not include a promise to end hostilities against Saudi Arabia, with which it shares a 1,500-km (900-mile) border.

Saudi Arabia had said rebel snipers were still entering Saudi territory. The insurgents denied this and said the Saudi military was attacking them.

Saudi fighter jets carried out 24 strikes on 10 northern districts on Monday and fired more than 200 rockets and rounds of heavy artillery, the rebels said on their website.

Yemen will next week start the trial of 35 Shi'ite rebels on terrorism and sabotage charges, a Defense Ministry website said.

Growing instability in Yemen, the Arab world's poorest country, is a serious worry for Western powers and neighboring countries. They fear the Yemen-based regional wing of al Qaeda, which claimed a failed December 25 bomb attack on a U.S.-bound plane, could strengthen its operations there and use it as a base for more international attacks.

The government also faces separatists in the south who complain of economic and social marginalization, a charge Sanaa denies.

REFORMS NEEDED

Diplomats say President Ali Abdullah Saleh's 31-year rule is tainted by corruption and doubts about its democratic credentials.

Last week, Yemen promised Western and Arab donors gathered at a London meeting to work on reforms and to start talks with the International Monetary Fund (IMF) on a program to revamp the economy and fight poverty.

On Tuesday, Foreign Minister Abubakr al-Qirbi said the government's decision to reduce fuel subsidies that were weighing on the economy was part of such reforms. [nLAE154950]

Yemen's partners would support Sanaa but the government would have to make economic and political changes, Ivan Lewis, Britain's minister of state in the foreign office, said after meeting Qirbi and the president in Sanaa.

"In the long term, security and stability depend on getting the economy moving, giving people decent services and having a political dialogue where people of different political persuasion can at least agree on working together in the interest of the country," Lewis told a news conference.

He also said Britain was helping Yemen to upgrade airport security to eventually allow the lifting of a suspension of direct flights by state carrier Yemenia to Britain, suspended last month on security grounds after the failed December 25 attack.

(Writing by Raissa Kasolowsky; Editing by Janet Lawrence)