Yemen, US sign military deal as country fights rebels

DUBAI, Nov 11 (Reuters) - Yemen has signed an agreement with the United States for cooperation on military intelligence and training, its official news agency reported, as the Arabian peninsula state faces a worsening rebellion in the north. The two countries signed the agreement in Sanaa on Tuesday after two days of talks, the second round of such negotiations, Saba reported.

The deal aims to strengthen cooperation in the "extermination of terrorism, smuggling and piracy," Saba quoted Yemen's Chief of Staff Ahmed Ali al-Ashwal, as saying.

Fighting between the Yemeni government and Shi'ite Muslim rebels, who say they suffer political, religious and economic marginalisation, intensified last August when Sanaa launched a military offensive against them.

Last week, neighbouring Saudi Arabia, OPEC's largest oil exporter, launched its own offensive against the rebels after they staged a cross-border raid and seized some territory, accusing Riyadh of collusion with Sanaa's war against them.

The United States and Saudi Arabia fear the fighting in Yemen's north and separatist unrest in the south could allow al Qaeda to expand its presence in Yemen into a new base for operations in the region. (Reporting by Raissa Kasolowsky; Editing by Dominic Evans)