The Yemen-based wing of al Qaeda called on Muslims in the Arabian Peninsula to wage holy war against Christians and Jews in the region, a further sign of the group's ambitions to mount new strikes outside its base.

Yemen is in the throes of a major crackdown on the global militant network's regional off-shoot, which grabbed the world's attention when it claimed a failed bomb attack on U.S.-bound plane in December.

Western powers and Yemen's neighbors, including top oil exporter Saudi Arabia, fear that the country's growing instability as it also struggles with a northern Shi'ite rebellion and southern secessionists, is allowing al Qaeda to strengthen operations there.

"The Christians, the Jews, and the treacherous apostate rulers have pounced on you ... you have no other way out from this plight other than to wage jihad," the wing's deputy leader, Saeed al-Shehri, said in an audio tape posted on a website often used by Islamist groups.

Shehri, a Saudi and a former inmate of the U.S. prison at Guantanamo Bay, was one of 30 al Qaeda members that Yemen claimed to have killed in an air strike in December but this was later denied by the global militant network.

"We advise you, our people in the peninsula, to prepare and carry your weapons and to defend your religion and yourselves and to join your mujahideen brothers," he said.

Shehri also said the Yemen-based wing's failed bomb attack on the plane to Detroit on December 25 had been carried out in coordination with network leader Osama bin Laden.

Bin Laden claimed responsibility for the attack in January, weeks after the al Qaeda in Yemen first said it was behind the operation.

CLASHES IN NORTH

Fighting in the north of the impoverished Arab country, where around 40 percent of the population survive on less than $2 a day, continued on Monday, with state media reporting clashes between Shi'ite rebels and Yemeni troops.

The rebels said on their website that Saudi rockets had killed two children and wounded two others at a farm and that Saudi warplanes carried out an air strike in Yemen's northern province of Saada on Sunday.

There was no immediate official response from Saudi Arabia, which was drawn into a five-year conflict between the Yemeni government and the rebels three months ago when the rebels seized some of the kingdom's territory.

Yemen said on Saturday it had handed the rebels a timetable for implementing the government's ceasefire terms, a week after rejecting a truce offer from the insurgents because it did not include the promise to end hostilities against Saudi Arabia.

A Yemeni official told Reuters on Monday that the government had received a response from the rebels, but declined to give further details as to the nature of the answer.

"The government is still studying the response," the official said, declining to be identified.

The insurgents said they staged their cross-border raid into Saudi Arabia in November because the kingdom had been allowing Yemeni troops to use Saudi territory to launch attacks against them.

Saudi Arabia, which shares a 1,500 km (900 mile) border with Yemen, declared victory over the rebels last month, but has continued launching air strikes and rocket attacks against the insurgents, who say they have now quit Saudi land.

Yemeni armed forces also fought rebels in the northern provinces of Saada and Malahidh on Monday, inflicting "heavy casualties" on the insurgents, the defense ministry's online newspaper September 26 reported.