By Ginny Hill BBC News, Yemen

The rebels are said to be followers of Shia cleric Hussein al-Houthi

President Ali Abdullah Saleh of Yemen has warned militant Islamists to disarm, during a week of clashes between a Shia militant group and the armed forces that left at least 42 soldiers dead.

Speaking in the capital, Sanaa, President Saleh said: "There is a special force ready to uproot them if they do not disband and put down their weapons as soon as possible. This operation would not take long. You have been forewarned".

Yemeni officials say 81 soldiers were injured during a wave of assaults, beginning in late January in the northern province of Saada. An unconfirmed number of rebels have also died in the fighting.

The latest outbreak of violence has given rise to fears that a recent tentative truce between the government and the rebels could unravel, sparking a renewed uprising among Yemen¿s Zaydi Shia minority.

The sporadic three-year insurgency has already claimed hundreds of lives. The rebels belong to a banned organisation called the Youthful Believers, representing a complex mix of political and sectarian grievances in the Zaidi Shia heartland between the capital, Sanaa, and the border with Saudi Arabia.

Tension in this mountainous tribal region was already running high after 45 Jews were forced from their homes two weeks ago by masked gunmen.

The Jews have taken refuge in a hotel in the provincial capital, Saada city, under the protection of a local sheikh.

Ambiguous aims

The Youthful Believers are followers of a prominent Zaidi family, headed by the cleric Hussein al-Houthi.

The cleric was killed during the government's first sustained military campaign against the Zaidi fighters in 2004, and leadership of the organisation was passed on to his father, Badr al-Din, during the second surge of fighting in 2005.

Hussein al-Houthi's brother, Abd al-Malik, now speaks for the group.

The rebels remain loyal to the memory of the cleric, but ambiguity surrounds their political aims.

They deny claims that they want to overthrow Yemen's government and re-instate the Shia Imamate that ruled northern Yemen until the 1962 revolution.

They are also said to oppose Yemen's alliance with Washington and reject President Saleh's co-operation in the US "war on terror" (though the Zaidi militants and the Sunni extremist al-Qaeda are deadly enemies).

"The Saada rebellion highlights a split within the Zaidi Shia elite," says Australian academic Sarah Phillips who writes on Yemeni politics.

"President Saleh himself is a Zaidi tribesman, but he is not a sayyid who claims descent from the Prophet Muhammad through his daughter Fatima and her husband, Ali."

The government alleges that Hussein al-Houthi, who is a sayyid, used his status to question the president's legitimacy.

Renewed insurgency

A precarious peace has largely held since March 2006, when 600 Houthi supporters were freed in an amnesty.

The president can ill afford another bloody insurgency on his hands

Opinion in Yemen is now divided as to whether the recent clashes are the result of an isolated ambush or indicate the start of a renewed insurgency.

"This latest incident won't escalate into a protracted battle," says Mohammad al-Asaadi, editor-in-chief of the Yemen Observer.

"The president has already threatened the insurgents that the army will retaliate if they don't disarm. He is trying to contain the violence and reinstate a dialogue to achieve a peaceful solution."

President Saleh can barely afford to have another bloody insurgency on his hands.

The complex sectarian and tribal nature of the Houthi rebellion has the potential to upset the delicate balance that forms the power base of the ruling party, the General People's Congress.

Disparate interests that oppose the regime could use the opportunity to press their interests, if the government is perceived as weakened.

Growing confidence

In addition, authoritarian measures pursued during previous campaigns against Zaidi fighters do not sit well with the administration's attempt to promote a democratic image to the international community.

Allegations that the Government used excessive force in suppressing the rebellion, conducted mass arrests, cracked down on opposition parties suspected of supporting the rebellion and imposed restrictions on the press all linger from the past few years.

The latest clash comes at a time of increasing confidence among foreign donors, with the UK and Gulf countries pledging nearly $5bn in aid over the coming years.

A decision is expected later this month on Yemen's application to join the threshold programme for USAID's Millennium Challenge Account.

The country has also embarked on an ambitious reform programme and is hoping to attract much-needed private investment.

President Saleh must be hoping that these shoots of progress will not be overshadowed by the prospect of a third extended military campaign.