Yemen says arrests Saudi financer of al Qaeda

DUBAI (Reuters) - Yemen has arrested a man described as al Qaeda's top financer in Yemen and Saudi Arabia, a security source told Reuters on Sunday, and seven Germans, a Briton and a South Korean have been kidnapped in north Yemen.

Militant activity in Yemen, a revolt in the north and a secessionist movement in the south has unsettled Western governments and Saudi Arabia, the world's biggest oil exporter.

Saudi Arabia brought an al Qaeda campaign of violence launched in the kingdom in 2003 under control, but fears are that Yemen will become the staging post for a revival of the effort to bring down the U.S.-allied Saudi royal family.

Saudi national Hassan Hussein Alwan was seized two days ago in Marib province in eastern Yemen, the security source said.

Earlier on Sunday a government source said nine foreigners, including seven Germans, were kidnapped in the Saada area of north Yemen, days after 24 medical workers were taken hostage, then released within a day.

The source said one of the Germans was a doctor at a local hospital which the other Germans, including his three children, were visiting. The defense ministry said in its online newspaper "September 26" that Saada rebels carried out the kidnapping.

The Briton is an engineer and the South Korean a female school teacher working with an aid agency. A source among the rebels of Saada's Houthi clan, members of a Shi'ite sect, denied that they did the kidnapping.

On Friday, tribesmen in Saada released 24 doctors and nurses they had abducted a day earlier with a demand that authorities should free two prisoners, a government official said.

The 24, most of whom were Yemenis but also included Egyptians, Indians and Filipinos, were working at a Saudi-backed hospital in the Saada area.

In 2004, tribesmen in Saada led by members of the Houthi clan began an intermittent rebellion against the government in protest at what they said was economic and religious discrimination.

(Reporting by Mohammed Sudam and Mohammed al-Ghobari; Editing by Louise Ireland)