The leader of the Islamic State of Iraq), Abu Bakr al-Baghdadi, said his group had funded cells of fighters from Syria’s al-Nusra Front – which is blacklisted by the United States – since the early days of the two-year-old uprising.

He said in a statement posted on Islamist websites and seen by Reuters on Tuesday that the two groups would operate under the joint title of the Islamic State of Iraq and the Levant.

“It’s now time to declare in front of the people of the Levant and the world that al-Nusra Front is but an extension of the Islamic State of Iraq and part of it,” Baghdadi said.

“We thus declare … the cancellation of the name of the Islamic State of Iraq and the name of al-Nusra Front and grouping them together under one name, the Islamic State of Iraq and the Levant,” he added.

The militant Islamist element of the Syrian conflict poses a quandary for Western powers and their Arab allies, which favor Assad’s overthrow but are alarmed at the growing power of Sunni Muslim jihadi fighters whose fiercely anti-Shi’ite ideology has fuelled sectarian tensions in the Middle East.

Baghdadi’s statement, first reported by the U.S.-based SITE monitoring service, could not immediately be authenticated.

He said his group had deployed battle-hardened fighters and sent funds to local al-Nusra cells set up in Syria to lay the groundwork for the armed uprising – which grew out of anti-Assad protests that erupted in March 2011 – but that it had refrained from announcing the link for security reasons.

No statement on the merger has come from al-Nusra Front.

The Front burst into prominence early last year, when it claimed responsibility for several powerful bombings in the Syrian capital Damascus and the northern city of Aleppo.

Since then it has expanded operations nationwide, winning recruits among rebels who see it as the most effective fighting force against Assad’s troops, and taking a leading role in capturing territory in the north, south and east of Syria.

In one day in November, SITE said al-Nusra had claimed responsibility for 45 attacks in Damascus, Deraa, Hama and Homs provinces that reportedly killed dozens of people, including 60 in a single suicide bombing.

NUSRA SUPPORT

At least 70,000 people have been killed since protests led by Syria’s Sunni majority broke out against Assad, whose minority Alawite sect is an offshoot of Shi’ite Islam.

Al-Nusra has gained support as the violence and misery in Syria radicalizes a population used to living under Assad’s secular rule. Experts have long said al-Nusra was receiving support from al Qaeda-linked insurgents in neighboring Iraq.

In Iraq’s remote western desert region next to Syria, where cross-border Sunni tribal ties are strong, Iraqi security officials have said since last year that Islamic State of Iraq was regrouping and recruiting.

Al Qaeda’s Iraqi wing and Syria’s Sunni Islamist insurgents share a hatred for Assad’s Alawite-based power and for Iraqi Prime Minister Nuri al-Maliki’s Shi’ite-led government, which they see as oppressors of Sunnis in both countries.

Insurgent recruitment has been spurred by growing protests against Maliki among Sunnis who feel sidelined since the fall of Saddam Hussein and the rise of the Shi’ite majority.

Al Qaeda in Iraq, which suffered serious setbacks before U.S. troops left at the end of 2011, has bounced back with a surge in suicide bombings and well-coordinated attacks across Iraq this year, including an ambush which killed 48 Syrian soldiers who had fled across the border.

Security officials say Anbar province, once the heartland of al Qaeda’s war on American troops, is again becoming a haven for the group as Iraqi forces struggle to cover a vast territory without the air support that U.S. forces troops once supplied.

A porous border where the Euphrates river snakes though both countries, and the remote caves and hills of the desert make ideal territory for insurgents to evade Iraqi security forces and smuggle arms and fighters between Iraq and Syria.

In December, the U.S. State Department designated al-Nusra Front as a foreign terrorist organization, essentially classifying it as an affiliate of al Qaeda in Iraq.

Last week, al Qaeda leader Ayman al-Zawahri called in an Internet statement for the establishment of an Islamic state in Syria after Assad’s ouster, as a step towards the Islamist goal of re-establishing an Islamic caliphate over Muslim lands.

That prospect alarms many in Syria, from minority Druze, Christians, Alawites and Shi’ites to conservative but tolerant Sunnis who fear al-Nusra would try to impose Taliban-style rule.

“Let your fight be for the sake of God, for the sake of bringing God’s sharia (Islamic law) to rule,” Zawahri said.

“Do all you can to ensure that the fruit of your struggle, God willing, an Islamic state … a state that would be a building stone in the return of the rightly-guided caliphate”.

(Additional reporting by Ahmed Tolba in Cairo and Patrick Markey in Baghdad; Editing by Dominic Evans and Alistair Lyon)

The leader of the Islamic State of Iraq), Abu Bakr al-Baghdadi, said his group had funded cells of fighters from Syria’s al-Nusra Front – which is blacklisted by the United States – since the early days of the two-year-old uprising.

He said in a statement posted on Islamist websites and seen by Reuters on Tuesday that the two groups would operate under the joint title of the Islamic State of Iraq and the Levant.

“It’s now time to declare in front of the people of the Levant and the world that al-Nusra Front is but an extension of the Islamic State of Iraq and part of it,” Baghdadi said.

“We thus declare … the cancellation of the name of the Islamic State of Iraq and the name of al-Nusra Front and grouping them together under one name, the Islamic State of Iraq and the Levant,” he added.

The militant Islamist element of the Syrian conflict poses a quandary for Western powers and their Arab allies, which favor Assad’s overthrow but are alarmed at the growing power of Sunni Muslim jihadi fighters whose fiercely anti-Shi’ite ideology has fuelled sectarian tensions in the Middle East.

Baghdadi’s statement, first reported by the U.S.-based SITE monitoring service, could not immediately be authenticated.

He said his group had deployed battle-hardened fighters and sent funds to local al-Nusra cells set up in Syria to lay the groundwork for the armed uprising – which grew out of anti-Assad protests that erupted in March 2011 – but that it had refrained from announcing the link for security reasons.

No statement on the merger has come from al-Nusra Front.

The Front burst into prominence early last year, when it claimed responsibility for several powerful bombings in the Syrian capital Damascus and the northern city of Aleppo.

Since then it has expanded operations nationwide, winning recruits among rebels who see it as the most effective fighting force against Assad’s troops, and taking a leading role in capturing territory in the north, south and east of Syria.

In one day in November, SITE said al-Nusra had claimed responsibility for 45 attacks in Damascus, Deraa, Hama and Homs provinces that reportedly killed dozens of people, including 60 in a single suicide bombing.

NUSRA SUPPORT

At least 70,000 people have been killed since protests led by Syria’s Sunni majority broke out against Assad, whose minority Alawite sect is an offshoot of Shi’ite Islam.

Al-Nusra has gained support as the violence and misery in Syria radicalizes a population used to living under Assad’s secular rule. Experts have long said al-Nusra was receiving support from al Qaeda-linked insurgents in neighboring Iraq.

In Iraq’s remote western desert region next to Syria, where cross-border Sunni tribal ties are strong, Iraqi security officials have said since last year that Islamic State of Iraq was regrouping and recruiting.

Al Qaeda’s Iraqi wing and Syria’s Sunni Islamist insurgents share a hatred for Assad’s Alawite-based power and for Iraqi Prime Minister Nuri al-Maliki’s Shi’ite-led government, which they see as oppressors of Sunnis in both countries.

Insurgent recruitment has been spurred by growing protests against Maliki among Sunnis who feel sidelined since the fall of Saddam Hussein and the rise of the Shi’ite majority.

Al Qaeda in Iraq, which suffered serious setbacks before U.S. troops left at the end of 2011, has bounced back with a surge in suicide bombings and well-coordinated attacks across Iraq this year, including an ambush which killed 48 Syrian soldiers who had fled across the border.

Security officials say Anbar province, once the heartland of al Qaeda’s war on American troops, is again becoming a haven for the group as Iraqi forces struggle to cover a vast territory without the air support that U.S. forces troops once supplied.

A porous border where the Euphrates river snakes though both countries, and the remote caves and hills of the desert make ideal territory for insurgents to evade Iraqi security forces and smuggle arms and fighters between Iraq and Syria.

In December, the U.S. State Department designated al-Nusra Front as a foreign terrorist organization, essentially classifying it as an affiliate of al Qaeda in Iraq.

Last week, al Qaeda leader Ayman al-Zawahri called in an Internet statement for the establishment of an Islamic state in Syria after Assad’s ouster, as a step towards the Islamist goal of re-establishing an Islamic caliphate over Muslim lands.

That prospect alarms many in Syria, from minority Druze, Christians, Alawites and Shi’ites to conservative but tolerant Sunnis who fear al-Nusra would try to impose Taliban-style rule.

“Let your fight be for the sake of God, for the sake of bringing God’s sharia (Islamic law) to rule,” Zawahri said.

“Do all you can to ensure that the fruit of your struggle, God willing, an Islamic state … a state that would be a building stone in the return of the rightly-guided caliphate”.

(Additional reporting by Ahmed Tolba in Cairo and Patrick Markey in Baghdad; Editing by Dominic Evans and Alistair Lyon)

Speaking at an annual gathering of Arab leaders in the Gulf state of Qatar, Moaz Alkhatib said he had asked U.S. Secretary of State John Kerry for American forces to help defend rebel-controlled northern parts of Syria with Patriot surface-to-air missiles now based in Turkey. NATO swiftly rebuffed the idea.

“It was a historic meeting,” said Syrian opposition spokesman Yaser Tabbara. “It’s a first step towards acquiring full legal legitimacy.”

The 22-nation League lent its support to giving military aid to Syrian rebels. A summit communique offered some of its toughest language yet against Assad, affirming member states had a right to offer assistance “including military, to support the steadfastness of the Syrian people and the Free Army”.

Alkhatib said the United States, which has given non-military aid to Syrian rebels, should play a bigger role in helping end the two-year-old conflict in Syria, blaming Assad’s government for what he called its refusal to solve the crisis.

“I have asked Mr. Kerry to extend the umbrella of the Patriot missiles to cover the Syrian north and he promised to study the subject,” he said, referring to NATO Patriot missile batteries sent to Turkey last year to protect Turkish airspace.

“We are still waiting for a decision from NATO to protect people’s lives, not to fight but to protect lives,” he added, addressing a body that barred Assad’s government in late 2011.

Responding to Alkhatib’s remarks, an official of the Western military alliance at its headquarters in Brussels said: “NATO has no intention to intervene militarily in Syria.”

Turkey, which reported a mortar landing harmlessly on its border on Tuesday, said it was up to the rest of NATO to decide if members wanted to expand the remit of the Patriot batteries.

Michael Stephens, a researcher based in Qatar for Britain’s Royal United Services Institute, said acceding to Alkhatib’s request would effectively put NATO at war with Damascus.

DEFENSIVE DEPLOYMENT

NATO’s current deployment of three Patriot missile batteries in southern Turkey is intended to be purely defensive. The Patriots are designed to shoot down hostile missiles in mid-air.

Alkhatib, a Sunni Muslim cleric, took Syria’s seat at the summit for the first time despite announcing on Sunday that he would step down as leader of the Syrian National Coalition.

Behind him sat Ghassan Hitto, the prime minister of a provisional opposition government that plans to run rebel-held area, and fellow senior opposition official George Sabra.

Alkhatib made a blunt call on other Arab leaders to “fear God in dealing with your people” and free political prisoners – a departure from anodyne tradition at the League.

But he also criticized what he called Western failure to bring an end to the conflict, and said an influx of foreign Islamist fighters should not be used by the West as a pretext to deny Syrians meaningful help. He denounced the presence in Syria of Iranians and Russians he said were backing the government.

Speaking at a news conference at the end of the summit: Qatar Foreign Minister Sheikh Hamad bin Jassim al-Thani defended the summit’s support for arming the rebels, saying that while it was not a “preferable” policy there appeared little alternative.

“We have done all we could to find a peaceful solution,” he said. “Unfortunately this solution did not come because … the regime was betting on a solution by force.”

But Kofi Annan, the former U.N. chief who tried to mediate an end to the fighting, said he expected little outside military intervention. He told an audience in Geneva: “We left it too late.” He added: “The Syrian people … are waiting for the killing to stop … As late as it is, we have to find a way of pouring water on the fire, rather than the other way around.”

He described as a “gross underestimate” the United Nations figure of 70,000 killed in a conflict that began with anti-Assad protests and turned into a sectarian-tinged armed insurrection.

The war in Syria has divided world powers, paralyzing action at the U.N. Security Council. The Arab world is also split, with Saudi Arabia and Qatar the most fervent foes of Assad, and Iraq, Algeria and Lebanon the most resistant to calls for his removal.

The conflict echoes strains between Sunni Muslims, notably in the Gulf, and Shi’ites, in Iraq, Lebanon and non-Arab Iran, whose faith is related to that of Assad’s Alawite minority.

Syrian rebels again fired mortar rounds into central Damascus on Tuesday. State television said several people had been wounded by “terrorist” mortar bombs that landed in the Syrian Arab News Agency SANA compound in the Baramkeh district.

State television said a suicide car bomber killed and wounded several people in northeastern Damascus, although opposition activists said the blast could have been a mortar.

Syrian state TV did not cover the Arab League meeting in Qatar, airing a program on makeup for women instead.

A group of pro-Assad hackers signing themselves the Syrian Electronic Army claimed an attack on an Arab League website that directed readers to a picture of Assad and derided the League’s Egyptian secretary-general for his “loyalty to the sheikhs”.

INTERNAL DISARRAY

Alkhatib’s decision to quit, which he blamed on the world’s failure to back the armed revolt against Assad also appeared to be motivated by internal disputes in the alliance. It undermined the alliance’s claim to provide a coherent alternative to Assad.

Liberals saw it as a protest against what they view as the rising influence of hardline Islamists in the Qatari-backed umbrella group set up in Doha in November.

Jane Kinninmont, of Britain’s Chatham House think-tank, said Qatar and the other Gulf states had been frustrated that the United States in particular and also European powers had not done more to help the Syrian opposition.

“The Gulf countries contrast this to the Iraq war which many of them were quite dubious about,” she said. “And they see a U.S. that’s far less interventionist today, even though there’s a much greater case for and immediate humanitarian need.”

(Additional reporting by Mirna Sleiman and William Maclean, Omar Fahmy in Cairo, Oliver Holmes and Erika Solomon in Beirut, Gulsen Solaker in Ankara, Stephanie Nebehay in Geneva and Adrian Croft in Brussels; Writing by Alistair Lyon; Editing by Alastair Macdonald and Jon Hemming)

Arabs say that Israeli settlement-building on land captured
in the 1967 Middle East war, including Arab East Jerusalem, has
made a two-state solution backed by the United States
unfeasible.

Qatar’s emir, Sheikh Hamad bin Khalifa Al-Thani, said his
country will contribute $250 million to the fund, which he
called for in an opening speech to an Arab summit in Doha that
focused on the crisis in Syria and stalled Israeli-Palestinian
peace efforts.

“The summit… calls for setting up a fund to support
Jerusalem to the value of $1 billion to finance projects and
programmes that would maintain the Arab and Islamic character of
the city and reinforce the steadfastness of its people,” the
draft resolution said.

The Islamic Development Bank, based in Saudi Arabia’s Red
Sea city of Jeddah, will manage the fund, it said.

Palestinian President Mahmoud Abbas welcomed the fund to
help protect the Arab character of the city and urged Arab
states to contribute to it.

“The Israeli occupation is working in a systematic and
hurried way to Judaise East Jerusalem, change its features and
uproot its Palestinian inhabitants, attacking the al-Aqsa Mosque
and its Muslim and Christian holy sites,” Abbas said in a speech
at the summit.

The fate of Jerusalem has proved one of the thorniest
sticking points in past Middle East peace negotiations.

Citing Jewish biblical ties to the holy city, Israel annexed
the Arab eastern half and its surroundings in 1980 in a move
rejected by the United Nations Security Council.

The Palestinian Authority (PA), which administers parts of
the Israeli-occupied West Bank, is in deep financial crisis.

On Friday the United States promised $500 million in aid to
the PA, and Israel pledged to resume transferring $100 million
in monthly tax revenue it collects on the Palestinians’ behalf.

Qatar’s emir did not say if the proposed Arab fund would be
channelled to the PA, whose writ does not run in East Jerusalem.

About 200,000 Israelis live in the annexed Arab part of
Jerusalem, including more than 1,000 in and around the mostly
Arab Old City.

Palestinian officials are sceptical of Arab aid pledges, as
few Arab countries carried through on promises last year to
cover a Palestinian funding gap aggravated by Israeli sanctions.

Last year Arab donations, including $200 million from Saudi
Arabia, constituted almost half the PA’s foreign aid, with the
United States and European Union providing around $330 million.

“As we’ve have seen many times before, unfortunately
decisions in Arab summits often do not materialise on the
ground,” said Ghassan Shaka, a senior member of the Palestine
Liberation Organisation.

“Financing is just a means, political help is the important
thing,” he said. “The Arab world must convince and apply
pressure so the world knows what’s required for peace.”

Leading opposition figure Moaz Alkhatib, one of the most popular figures in the revolt against Assad, plans to speak to the gathering of Arab heads of state in Qatar, for whom Syria’s increasingly sectarian war is the main concern.

Alkhatib jolted the opposition coalition and its Arab backers on Sunday by announcing his resignation as head of the National Coalition for Syrian Revolutionary and Opposition Forces, blaming the world’s failure to back the armed revolt.

Nevertheless he, or a colleague, is also expected to take Syria’s chair, vacant since the Arab League suspended Syria in November 2011 in protest at Damascus’s use of violence against civilians to quell dissent.

“Arab foreign ministers have requested that the Syrian seat be given to the opposition. This will be discussed at the summit,” an Arab League official told reporters.

“I can’t say (what will be the outcome) but we hope that they go by the recommendation.”

Alkhatib’s decision to quit, which also appeared to many commentators to be motivated by internal disputes in the alliance, undermined the alliance’s claim to provide a coherent alternative to Assad.

Liberals interpreted his decision as a protest against what they see as an the increasing influence of hardline Islamists inside the coalition backed by Qatar.

The coalition was formed in Doha in November as an alternative to Assad, superseding the Syrian National Council, another umbrella opposition organization largely influenced by the powerful Muslim Brotherhood which now, along with its allies, is a dominant bloc in the coalition.

But the coalition has not shaken an image as consisting mostly of foreign-backed exiles immersed in political wheeling and dealing.

Alkhatib said in remarks broadcast by al-Jazeera that his views on the need to restructure and broaden the coalition had played a small part in his decision to step down.

“The bigger reason is a protest against the position of world states which are only trying to push through their wishes, aspirations or ways to solve the (Syrian) crisis without feeling the pain that people suffer every day,” he said without elaborating.

Alkhatib, a former imam at Damascus’s Umayyad Mosque – one of the oldest and most famous mosques in the world, flew to Qatar on Monday evening to deliver a speech at the summit.

It was not immediately clear if Alkhatib’s decision to attend the conference signaled he was going back on his resignation or not.

The Arab League official said without elaborating that Alkhatib’s resignation “wasn’t accepted”.

Moderate civilian and military factions in his hometown of Damascus on Monday urged him to reconsider his decision to quit.

On al-Jazeera, Alkhatib acknowledged there had been differences of view inside the coalition about the wisdom of setting up a provisional government.

He was referring to last week’s decision at an opposition meeting in Istanbul to appoint Islamist-leaning technocrat Ghassan Hitto as a provisional prime minister to form a government to fill a power vacuum in Syria arising from the revolt, which has killed more than 70,000 people.

Apart from Syria, the summit will also discuss the stalled Israeli-Palestinian peace efforts and long-standing plans to restructure the Arab League.

(Additional reporting by Mirna Sleiman, writing by William Maclean, editing by Sami Aboudi and Jon Boyle)

In his more optimistic moments, the photography shop manager says dialogue should be given a chance to fix the conflicts tearing at Yemen’s stability and alarming its bigger neighbor, oil superpower Saudi Arabia.

But having lost a cousin in the 2011 revolt that forced the then president Ali Abdullah Saleh to step down, Absi said some of the delegates at the talks were “killers of youth”, referring to the young men who died in the uprising.

“They are responsible for the problems they are trying to fix,” Absi, 40, told Reuters inside his shop, which looks out on Street Seventy, focus of the Arab Spring uprising that ended the 33-year rule of then head of state Ali Abdullah Saleh.

“But we want to move on. Yemen needs to move on, and we can only move on if we talk to each other,” he said.

His comments reflect the uneasy mix of cynicism and hope stirred by the so-called national dialogue conference aimed at stabilizing Yemen, an impoverished country of 25 million, its mountains and deserts home to what Western officials say is al Qaeda’s most dangerous offshoot.

Monday’s opening ceremony set out an ambitious agenda of reforms including drafting a new constitution that could install a federal state and limiting the number of terms a head of state can serve.

After years of factional turbulence, and a generation after a crippling war between the northern and southern parts of the country, could lasting change for the better be on the way?

It’s a question with global implications: Stabilizing Yemen, grappling with Islamist militants, southern secessionists and northern rebels, is an international priority.

The country flanks vital shipping lanes, and the United States sees it as a front line in its war on al Qaeda and has used drones there for years to target the group, which it says has planned attacks on international targets including airliners.

Further along Street Seventy, Naji Ali, another shop owner, complained that many Yemenis were yet to see any benefits of the uprising that forced Saleh out after 33 years in office.

The 39-year-old said that prior to the uprising, his bookshop was bringing in about 20,000 rials ($93) a day.

“Now, I make around 5,000 rials per day, and I would be very lucky if I can reach 10,000 rials,” he said as he directed an elderly man to a pay telephone booth he had set up to prop up his income.

“The situation has grown worse. True, there is better security, but there are no jobs and no money. Many people are begging on the streets or sift through the garbage for food.”

The political turmoil that has gripped Yemen since protests erupted in 2011 against Saleh has left the country in near ruin.

As the economy ground to a halt, southern secessionists grew more vocal in their demands for a separate state and Islamist militants linked to al Qaeda grew more violent.

Some Yemenis say security and public services have improved since President Abd-Rabbu Mansour Hadi succeeded Saleh under a Gulf-backed deal that saw the veteran strongman step down.

But many complain the recovery has been too slow, and blame remnants of Saleh’s regime, many of whom stayed on in their posts in the government’s bureaucracy, for obstructing recovery.

“This conference is the most important event in recent Yemeni history,” said Aida Hussein Ashour, a delegate representing Saleh’s General People’s Congress party from the southern province of Lahej.

“It will help us prepare the foundations for a new state in Yemen, a new future for Yemen,” she added.

OBSOLETE SYSTEM

Yemen, the second-poorest Arab state after Mauritania, is in sore need of good news. The World Bank says a third of the country’s population live under the poverty line of $2 a day and unemployment is estimated at about 35 percent, with youth joblessness at 60 percent.

Malnutrition among children is among the highest in the world. The United Nations Children’s Fund, UNICEF, has said that 57 percent of Yemen’s 12 million children are chronically malnourished – the highest level of chronic malnutrition in the world after Afghanistan.

In a decree on the eve of the meeting, Hadi called for a shakeup of the political system, which he said was obsolete and responsible for keeping Yemen at the “end of the caravan”.

He outlined nine areas which he said will need to be tackled by specialized committees over a six-month period ahead of general elections in February 2014, expected to give Yemen its first democratic government after the uprising.

These include drafting a new constitution, revamping the civil service, unifying the armed forces which had been split since the early days of Saleh’s rule, and reviving the economy.

To some, the mere holding of the talks was an impressive achievement in itself.

But many Yemenis say the journey is fraught with uncertainties. Sharp ideological differences and tribal and party loyalties makes it hard for the delegates to agree on the reforms needed to lift Yemen out of the crisis.

Skeptics argue that many of the 565 delegates are illiterate and thus incapable of a meaningful contribution.

SOUTH IS THE KEY

Most people agree, however, that the main challenge is to find a solution for growing demands by Yemenis in the south for separation.

South Yemen merged with North Yemen in 1990 after the collapse of its main patron, the Soviet Union. Secessionists failed in a civil war in 1994 to reverse the unification.

Secessionist leaders in a coalition known as al-Herak al-Janoubi (Southern Movement) complain that unity turned them into second class citizens.

Having taken to the streets to air their own grievances against Saleh’s rule, many in northern Yemen recognize the deep feeling of injustice that drives ordinary people to join regular protests in downtown Aden, capital of the former South Yemen.

A divorce by southern Yemen, where much of the country’s dwindling oil is located, could set off further fragmentation of the country at a time when the central government is still struggling to impose its control over the country.

In Eastern Yemen, local political leaders in Hadramout, once part of the former South Yemen bordering Saudi Arabia and Oman, have been hinting at desire for separation.

And in northern Yemen, Shi’ite Muslim rebels in the Houthi movement, which champions the goal of restoring a 1,000-year rule by imams claiming to be descendents of the family of Prophet Mohammad, are in control of much of several provinces after the central government failed to crush their revolts.

Activists say an agreement at the “dialogue” conference for a just solution for the southern issue could buy the country’s unity extra time while the new government tries to persuade southern Yemenis to keep the union.

Asked to define a “just solution”, Shafie al-Abed, a Herak activist from Shabwa province, said: “An interim federal state comprising two regions that will guarantee the south the right to self determination.”

(Editing by William Maclean)

Stabilizing Yemen, a ally grappling with al Qaeda militants, southern secessionists and northern rebels, is an international priority due to fears of disorder in a state that flanks oil superpower Saudi Arabia and major shipping lanes.

Yemen has struggled to restore normality since President Abd-Rabbu Mansour Hadi was elected in February 2012 following nearly a year of Arab Spring-style protests that forced his predecessor Ali Abdullah Saleh to step down after 33 years in power.

The national dialogue conference, promised under a Gulf-brokered deal, is the country’s most important political gathering in fifty years and is intended to pave the way for elections in 2014.

It comprises representatives of various political parties from all over Yemen and is expected to last for six months.

Some 565 men and women will work in committees to draft a new constitution, prepare proposals on government decentralization, discuss grievances of the former South Yemen and northern Shi’ite rebels and offer ideas on restructuring the armed forces.

Reforms of the military are expected to reduce the influence of army factions loyal to Saleh, still seen as a powerful politician.

Opening the conference at the presidential palace in Sanaa amid tight security, Hadi said the restive south was the main challenge.

“Any attempt to impose a vision to deal with this (southern) issue by force will lead to big failure and big dangers,” he said.

The conference would place the first building blocks of a “new, unified, safe and free Yemen,” he said.

Most of Yemen’s fast-declining oil reserves are in the south.

The British ambassador to Yemen said the conference was an important moment for the country.

“The situation in Yemen is fragile,” Nicholas Hopton told Reuters. “However it is much better than it was two years ago and I think the momentum is in the right direction,” he added.

DEMONSTRATORS MARCH

As delegates were taking their seats, tens of thousands of demonstrators gathered in the southern city of Aden to demand secession.

Flags of a once-independent southern Yemeni country fluttered from cars and buildings across the port city. There were separatist marches in other southern towns including Mukalla, Tarim, al-Shihr and Sayoum, witnesses said.

Hundreds of security forces took positions outside Aden’s main buildings such as banks and government offices but no clashes were reported, the witnesses said.

Nasir al-Nouba, a leader of the secessionist Southern Movement, told reporters: “The conference in Sanaa will fail. Those who are taking part as representatives of the Southern Movement do not represent us. They represent themselves.”

South Yemen merged with North Yemen in 1990 after the collapse of its main patron, the Soviet Union. Secessionists failed in a civil war in 1994 to reverse the unification.

Some secessionist leaders of a political grouping called Herak complain of discrimination by Sanaa, including appropriation of public land and dismissal of tens of thousands of administrators.

Hadi has set up committees to looks into these grievances.

Western nations suspect that attempts by some southern leaders to break away have the backing of Iran, arch-foe of Saudi Arabia and the United State. Yemeni officials have also accused Iran of backing the Shi’ite Houthi rebels who operate in northern Yemen.

Iran denies any interference in Yemen’s affairs.

(Additional reporting by Mohammed Mokhashaf in Aden; Editing by Erica Billingham)

Stabilizing Yemen, a U.S. ally grappling with al Qaeda militants, southern secessionists and northern rebels, is an international priority due to fears of disorder in a state that flanks oil superpower Saudi Arabia and major shipping lanes.

Yemen has struggled to restore normality since President Abd-Rabbu Mansour Hadi was elected in February 2012 following a year of Arab Spring-style protests that forced his predecessor Ali Abdullah Saleh to step down after 33 years in power.

Hadi, opening a so-called national dialogue conference expected to last six months, said the restive south was the main challenge facing the discussions.

“Any attempt to impose a vision to deal with this (southern) issue by force will lead to big failure and big dangers,” he said.

The conference would place the first building blocks of a “new, unified, safe and free Yemen,” he added.

ARMY FACTIONS LOYAL TO SALEH

The talks, promised under a Gulf-brokered deal and intended to pave the way for elections in 2014, are expected to cover reforms of the military that would reduce the influence of army factions loyal to Saleh, still seen as a powerful politician.

As about 565 delegates from across the political spectrum were taking their seats at the talks in the capital Sanaa in the north, tens of thousands of defiant demonstrators gathered in the southern city of Aden to demand secession.

Flags of a once independent southern Yemeni country fluttered from cars and buildings across the port city. There were separatist marches in other southern towns including Mukalla, Tarim, al-Shihr and Sayoum, witnesses said.

Hundreds of security forces moved in to the main areas of Aden, positioning themselves outside key buildings such as banks and government offices, the witnesses said.

Nasir al-Nouba, a leader of the secessionist Southern Movement, told reporters: “The conference in Sanaa will fail. Those who are taking part as representatives of the Southern Movement do not represent us. They represent themselves.”

“The people of the south will continue their peaceful struggle for independence,” he added.

South Yemen emerged as an independent state, separate from North Yemen, when Britain withdrew in 1967 from areas it controlled along the Arabian Peninsula’s southern coastline.

Conflict between the political systems of the tribal North and Marxist South led to war in 1979. But when its major patron the Soviet Union fell apart, the South merged in 1990 with the militarily stronger Yemeni Arab Republic based in Sanaa.

HISTORIC MISTAKE

Secessionists failed in a civil war in 1994 to reverse the unification between North and South.

Now some southern secessionist leaders say unity with Sanaa was a historic mistake, leading to appropriation of public land by northerners, dismantling of southern institutions including the army, and dismissal of tens of thousands of administrators.

Most of Yemen’s fast-declining oil reserves are in the south, but many southerners say northerners discriminate against them. The central government denies any discrimination.

Western nations suspect that attempts by some southern leaders to break away have the backing of Iran, arch-foe of the Saudis and Americans. Yemeni officials have also accused Iran of backing the Shi’ite Houthi rebels who operate in northern Yemen.

Iran denies any interference in Yemen’s affairs.

(Additional reporting by Mohammed Mokhashaf in Aden; Editing by Andrew Heavens)

Home to the U.S. Fifth Fleet, the tiny state has been hit by
unrest since the revolt in early 2011, becoming a front line in
a region-wide tussle for influence between Shi’ite Muslim Iran
and Sunni Arab states such as Saudi Arabia.

Saudi Arabia and the United Arab Emirates sent in 1,500
troops on March 14, 2011 to help suppress the uprising.

The mass disturbances were crushed but demonstrators, mainly
from Bahrain’s Shi’ite majority, have continued small protests
on an almost daily basis demanding equality and a constitutional
monarchy in the kingdom ruled by the Sunni al-Khalifa family.

The latest violence followed the death of two young men
during clashes with police last month as Bahrainis marked the
second anniversary of the Feb. 14 start of the uprising. It is
likely to cast a shadow over reconciliation talks between the
government and the opposition aimed at ending political turmoil.

The Islamist Wefaq association – the country’s biggest
opposition group – said that, by midday on Thursday, at least 10
people had been injured by security forces who they said used
live bullets, birdshot and teargas against “peaceful
demonstrators”.

Three of those injured were in critical condition, the group
said in a report on its website. It posted pictures of injuries,
including a limb hit by what appeared to be a live round.

The Information Affairs Authority said several policemen
were injured when demonstrators attacked them with petrol bombs
and iron rods, and detonated homemade bombs “endangering the
lives of innocent bystanders and security personnel”.

“Police used restraint to restore order and all force used
was necessary and proportionate,” the assistant chief of
security for operations said in the statement.

The statement said the demonstrators had stolen cars,
torched vehicles and blocked the streets with large rocks and
lampposts and scattered nails and oil on roads. It attached
pictures of barricaded roads and torched vehicles.

It was not immediately possible to verify the authenticity
of the reports or pictures given by either side.

An international inquiry commission, invited by Bahrain’s
government, said in a report in November 2011 that 35 people had
died during the uprising. The dead were mainly protesters but
included five security personnel and seven foreigners. The
report said five people had died from torture.

The opposition puts the death toll at more than 80.

Bahrain’s opposition and government resumed reconciliation
talks last month for the first time since July 2011, but little
progress has been reported in several sessions of negotiations.

(Editing by Pravin Char)

Several hundred demonstrators, mostly youths from largely Shi’ite villages, blocked roads around the capital Manama and hurled stones and fire bombs at police, who responded with birdshot and tear gas, witnesses said.

Security forces confirmed they had fired warning shots at the crowds and one young man had been killed in the protests, which began in the early morning and lasted almost all day.

The clashes were the most violent in recent months and could mar talks that began on Sunday between mostly Shi’ite Muslim opposition groups and the Sunni-dominated government to try to end political deadlock in Bahrain, which is home to the U.S. Fifth Fleet.

Bahrain has seen almost daily demonstrations in the run-up to the anniversary of the revolt, which has put the kingdom on the front line of a region-wide tussle for influence between Shi’ite Muslim Iran and Sunni Arab states such as Saudi Arabia.

Mass protests that erupted in February 2011 at the height of the Arab Spring were crushed, but small demonstrations demanding greater rights for Bahrain’s Shi’ite majority and an end to the absolute power of the Sunni ruling family have continued.

Bahrain’s chief of public security, Brigadier-General Tariq Al Hassan, said police had fired warning shots on Thursday to disperse a crowd that had attacked them with fire bombs, stones and iron rods, injuring several, some seriously.

“Officers discharged birdshot to defend themselves. At least one rioter was injured in the process. A short time later, a young man was pronounced dead at Salmaniya Medical Center,” he said in a statement.

He said several members of the force involved in the incident were being investigated to determine the circumstances of the death.

The main opposition group Wefaq named the youth was Ali Ahmed Ibrahim al-Jazeeri, a 16-year-old Shi’ite, and said he had been killed in the village of Diya, near Manama.

“DOZENS” HURT

It said dozens of others had been hurt, some seriously, and posted pictures of casualties, including a photograph of the dead youth with bandages on his abdomen.

Wefaq said there had also been a confrontation on Sitra island, south of Manama.

“Large numbers of armored vehicles, police cars and buses, convoys of military vehicles and troops deployed in the areas … to face the peaceful protests demanding freedom and democracy,” it said.

The state news agency BNA said masked people had forced a number of schools to close down and chained their doors shut to prevent students and staff getting in.

A spokesman for EU foreign policy chief Catherine Ashton said news of the protester’s death was “disquieting”.

“We call on all parties to exercise restraint, avoid provocations, and reject violence, especially during the demonstrations today,” he said.

An international inquiry commission said in a November 2011 report that 35 people had died during Bahrain’s uprising. The dead were mainly protesters but included five security personnel and seven foreigners. The report said five people had died from torture. The opposition puts the death toll at more than 80.

Bahrain’s opposition and government resumed reconciliation talks on Sunday for the first time since July 2011.

Officials said delegates had agreed at Wednesday’s session on some ground rules for the talks, including the role of government representatives and mechanisms for implementing any agreement, paving the way for further sessions next week.

(Writing by Sami Aboudi; Editing by Jon Hemming and Michael Holden)