Yemen's Saleh hopes to woo Gulf cash in Saudi visit

RIYADH (Reuters) - Yemeni President Ali Abdullah Saleh visits Saudi Arabia on Tuesday to try to persuade Riyadh to lead Gulf Arab donors by example in assisting his impoverished country as it battles an al Qaeda resurgence.

Instability in Yemen, the Arab world's poorest country, is a major security concern to the United States and Gulf Arab countries, mainly the world's top oil exporter Saudi Arabia, with whom it shares a porous 1,500 km (940 mile) border.

Saleh's visit comes ahead of a meeting in Riyadh on Saturday of the wealthy six-member Gulf Cooperation Council (GCC) to discuss aid to Yemen.

A Yemeni diplomat said his country hopes to raise $40 billion from international donors for its 2011-2015 economic development plan. In a 2006-2010 plan, GCC countries contributed $3.7 billion of $5.7 billion granted by international donors.

International assistance is crucial for Yemen as it would help foster reforms and the development of its fragile economy to address grievances that are at the heart of its instability.

About 35 percent of Yemen's 23 million people live in poverty.

"Saudi Arabia is the GCC's most influential member and Yemen's closest neighbor. We hope that it will lead by example and use its influence within the GCC to assist our country," the diplomat said.

"This will prove crucial not just within the GCC but also with other international donors to deliver on their commitments made toward Yemen," he added.

Saleh was expected to assure King Abdullah that Yemen's army would be more vigilant in monitoring the border to shore a ceasefire between Saudi Arabia and Yemeni Shi'ite rebels and prevent Al Qaeda militants from sneaking into the kingdom.

Riyadh was sucked into fighting with the rebels in November when the insurgents seized some Saudi territory, complaining that Yemeni troops had been allowed to use Saudi land to launch attacks against them. At least 113 Saudi soldiers were killed in the conflict.

"The security of Yemen means the security of the Arabian peninsula and the Gulf," Saudi Al-Watan newspaper wrote in a commentary about Saleh's visit.

Yemen, which agreed to a ceasefire with the northern Shi'ite rebels this month, is due to deploy along the border according to the terms of the ceasefire. The Yemeni diplomat said Saleh would also discuss with Riyadh a prisoner return, but did not elaborate.

Yemeni rebels have handed over three Saudi soldiers under the terms of the ceasefire with Sanaa, and were expected to release two more captive soldiers. Riyadh said on Thursday that it was holding 500 'infiltrators', but did not disclose their identities, why they were held or when they would be freed.

Western powers and Riyadh worry that government control could collapse in Yemen, enabling al Qaeda to strengthen its presence there and use it as a base for new attacks.

In addition to the northern insurgency, Yemen is also facing separatist sentiment in the south. Sanaa declared an open war on Al Qaeda last month after the group's Yemen-based regional wing claimed responsibility for a failed bomb attack on a Detroit-bound plane.

(Reporting by Souhail Karam; Editing by Jon Boyle)