Yemeni rebels report border clash with Saudi forces

(Corrects displaced figure to 150,000 from 250,000 in paragraph 11)

SANAA, Oct 22 (Reuters) - Yemeni Shi'ite rebels said clashes had broken out between Yemeni people and Saudi forces trying to build a border fence, with several killed and injured on both sides.

"Shooting by Saudi forces ... occurred after confrontations with local residents over the construction by the troops of a separating fence on Yemeni territory," said a statement on the rebels' website late on Wednesday.

"This led to some being killed and injured on both sides."

"Residents of the area reject any fence which would have a negative economic impact on them and cut them off ... from their brethren on the other side," it said.

There was no immediate Saudi reaction to the report.

On Monday, the insurgents accused Saudi forces of opening fire into the same area in support of the Yemeni government's offensive against them. A Yemeni security official denied the report then, saying Saudi Arabia had no role in the war.

The rebels, who say they are fighting political, economic and religious marginalisation, have often accused neighbouring Sunni power Saudi Arabia of fighting on the side of President Ali Abdullah Saleh, showing footage of seized Saudi weaponry.

Saudi Arabia, the world's biggest oil producer, and its ally the United States fear the conflict in Yemen's north and a separatist movement in the south will enable al Qaeda to establish a stronger foothold in the Arabian Peninsula state.

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 Yemeni army launched Operation Scorched Earth to crush the rebels in August. Around 85 people were killed in an army raid on an improvised refugee camp last month. Aid groups say around 150,000 people have been displaced by the fighting, which first broke out in 2004.

Media and aid groups have been given little access to the war zone, making it almost impossible to corroborate conflicting claims. (Reporting by Mohamed Sudam; writing by Firouz Sedarat; editing by Andrew Roche)