Al Qaeda-tied militants attack south Yemen village

ADEN, July 25 (Reuters) - Al Qaeda-linked militants attacked

a village in south Yemen on Wednesday, fighting to regain

control of territory for the first time since they were driven

from their strongholds in a U.S.-backed army offensive last

month.

The head of a local militia said his fighters had managed to

repel the militants, killing two of them in clashes in the

village of Batias in the province of Abyan, where armed

Islamists established a foothold last year.

Wednesday's attack highlighted the enduring threat of

Islamist militancy in Yemen and may alarm the United States and

Saudi Arabia, who increasingly view the impoverished state as a

front line in their war on al Qaeda and its affiliates.

Militants went on a rampage in Abyan last year, seizing

several towns and imposing sharia (Islamic law) while

then-President Ali Abdullah Saleh grappled with mass protests

that that eventually toppled him.

Washington supported a Yemeni army campaign that was hailed

as a major victory after the area was "liberated" from Islamist

fighters in June. But residents and analysts say the militants

are simply lying low and waiting for a chance to regroup.

Despite losing their territorial base, militants have since

shown their clout remains formidable, assassinating a top

southern military commander and killing 10 people in a suicide

bombing at a police academy in the capital Sanaa.

On Tuesday, two militants were killed in the southeastern

port city of Mukalla when an explosive device they were

preparing to use against local security officials went off by

accident, a local official said.

(Reporting by Mohammed Mukhashaf; Writing by Isabel Coles;

Editing by Mark Heinrich)