Government continued efforts to improve security situation; announced new arrest related to 2000 bombing of USS Cole.

Police recaptured 2 militants accused of masterminding 2000 bombing of USS Cole; 2 had escaped custody in May 2003 prison break. Authorities also said several other militants arrested in remote mountain region.

Saudi Arabia agreed to stop construction of security fence along frontier with Yemen. Fence designed to tighten border following 2003 Riyadh suicide bombings.

Website posted statement purportedly from Yemeni branch of al Qaeda threatening to strike U.S. interests in retaliation for 2002 killing of militant leader by CIA drone plane. Despite threat, government making progress in efforts to improve security situation.

Security forces reportedly foiled plot to blow up UK embassy in capital, Sanaa. Government walking fine line between cooperating with U.S. in war on terror and appeasing populace strongly opposed to U.S. policies in region.

Government captured Mohammed Hamdi al-Ahdal, senior al Qaeda leader believed to have played major role in October 2000 attack on U.S.S. Cole.

Government continues to walk fine line between supporting U.S. in war on terror and appeasing largely anti- American populace. Authorities say Islamist militants arrests in recent weeks confessed to planning attacks on U.S. and British embassies.

Government continues to walk fine line between supporting U.S. in war on terror and appeasing largely anti- American populace. Authorities handed over to Saudi Arabia suspected al Qaeda member thought to have had role in May Riyadh bombings.