Yemen accuses Iran of backing Shi'ite rebels

SANAA, May 24 (Reuters) Yemen today accused Iranian religious institutions of giving financial support to Shi'ite rebels, who have been fighting government forces in northern Yemen.

The rebels oppose Yemen's close alliance with United States.

Yemeni officials say the group wants to reinstall the Islamic rule that was overthrown in 1962.

Hundreds of people have been killed and thousands have fled their homes due to the heavy clashes.

''The rebels receive funds from religious institutions in Iran,'' Yemen's Interior Minister, Rshad al-Alimi told reporters.

''We know how their (Iranians) intelligence game is played,'' he added.

Last week, Yemen recalled its ambassador to Iran over the alleged support. Shi'ite Muslim Iran denies the accusations.

Fierce clashes between the rebels, led by Abdul-Malik al-Houthi -- also known as the Houthis -- and the security forces erupted in January 2006, after the group attacked government installation in the northern province of Saada, triggering a major security crackdown.

The Houthis deny receiving Iranian support.

Alimi said that Iran was harbouring the rebels' leaders, but did not name them.

Yemen, the ancestral homeland of al Qaeda leader Osama bin Laden, joined the US-led war on terrorism after the Sept. 11 attacks on US cities. The Houthis are not linked to al Qaeda.

REUTERS RC RK1845