Saudis claim gains from Yemen rebels, rebels deny it

By Raissa Kasolowsky

DUBAI (Reuters) - Saudi Arabia said it had regained control of territory seized by Yemeni rebels in an incursion last week, but the rebels denied the claim and said Yemeni villages were being bombed heavily.

Saudi Arabia launched air strikes on rebels in northern Yemen last week after Shi'ite Muslim insurgents crossed the border and said they had seized an area called Jabal Dukhan.

The rebels on Sunday denied they had lost control of Jabal Dukhan and said the kingdom's offensive was continuing, with Yemeni villages the target of heavy bombing.

The world's top oil exporter has become increasingly anxious about instability in Yemen, which is facing a Shi'ite insurgency in the north, separatist sentiment in the south and a growing threat from resurgent al Qaeda fighters.

"The situation is calm ... especially in Jabal Dukhan, of which full control has been regained," Prince Khaled bin Sultan bin Abdul-Aziz, assistant minister for defence and aviation, said on Saturday, the Saudi Press Agency reported.

Prince Khaled said three members of the Saudi security forces were killed and 15 wounded in fighting on the Saudi-Yemeni border.

Four Saudi soldiers were missing, Prince Khaled said, but he denied they had been taken prisoner. He said Saudi security forces had arrested several rebels.

Instructions from Saudi Arabia's King Abdullah specified that any rebel caught on the Saudi side of the border would be arrested, Prince Khaled said, and the kingdom "has not, and will not interfere inside Yemeni borders".