Yemeni Shi'ite rebels deny assassination attempt

SANAA/RIYADH (Reuters) - Yemeni Shi'ite rebels denied on Saturday carrying out an assassination attempt on an Interior Ministry official which was staged only hours after a ceasefire agreement came into force.

Yemen's government and rebel leader Abdul Malik al-Houthi agreed late on Thursday that a truce would begin at midnight (4 p.m. EST), aiming to halt one of the country's three conflicts.

Interior Ministry undersecretary Mohammed al-Qawsi, whose car was shot at on Friday in the northern city of Saada, said shortly after the attack that minor violations had occurred because not everyone was aware of the ceasefire, but that the deal still held.

The rebels issued the denial on their website, and said Houthi had asked his supporters to clear mines and open roads. Some of the 250,000 people displaced by the war were returning to their homes, they added.

Roads to Saada, center of the mountainous province where many of the rebels are based, were now clear, and the truce was being respected by the insurgents, the rebel statement said.

Yemen's government, which is also battling al Qaeda and a separatist movement in the south, had been exchanging ceasefire proposals with the Shi'ite rebels for several days.

Yemeni forces have been fighting Houthi's supporters since 2004 and previous ceasefires have not lasted.

Turmoil in Yemen has raised fears that the country may become a failed state, allowing al Qaeda to use it as a base for attacks in the region and beyond. The Nigerian accused of trying to blow up a U.S. plane in December had links to Yemen.

SAUDI DEMANDS RELEASE OF SOLDIERS

Top oil exporter Saudi Arabia gave the rebels on Saturday 48 hours to hand over five Saudi soldiers they have captured.

"There are five prisoners who must be returned and they were given a 48-hour time limit," said Assistant Minister of Defense Prince Khaled bin Sultan, quoted by state news agency SPA.

Prince Khaled said the Yemeni army should take up positions along the Saudi-Yemeni border "to prevent the entry by infiltrating groups," SPA reported. Saudi Arabia has set as a truce condition that rebels withdraw from border regions to allow the Yemeni army to secure the area.

Riyadh declared victory over the Houthi rebels last month, two days after they themselves offered a truce and said they had left Saudi territory.

Saudi Arabia was drawn into the conflict in November when the rebels seized Saudi territory, complaining that Riyadh was letting Yemeni troops use its land for attacks against them.

The rebels, from the Zaidi sect of Shi'ite Islam, have long complained of social, religious and economic discrimination in a country with a Sunni Muslim majority.

In southern Yemen at least one protester was killed and six injured when police opened fire at a separatist demonstration on Saturday, residents and Yemeni news websites said.

(Reporting by Souhail Karam in Riyadh; Additional reporting by Mohammed Mukhashaf in Aden; Writing by Jason Benham and Firouz Sedarat; Editing by David Stamp))