Sana'a, Yemen - Yemeni President Ali Abdullah Saleh said in remarks published Wednesday that an al-Qaeda cell dismantled by security forces in south-eastern Yemen had plotted terrorist attacks in his country and its oil-rich neighbour Saudi Arabia.

Saleh was quoted by state newspapers as saying Yemeni police had seized documents containing "dangerous information unveiling a plan by the al-Qaeda organization to carry out terrorist acts in Yemen and Saudi Arabia."

He reportedly made the remarks in a telephone conversation with Saudi Crown Prince Sultan bin Abdul-Aziz late on Tuesday.

Authorities said Tuesday that a leading member of al-Qaeda in Yemen was killed in a gunbattle the previous day between police and al-Qaeda suspects holed up in a hide-out in the south-eastern province of Hadhramout.

Official sources said Hamza al-Quaiti, a suspected mastermind of several terror attacks in Yemen in recent months, was among five al-Qaeda suspects killed in the shootout in Tarim town, Hadhramout.

Two suspects were injured in the firefight and arrested by police. Two police officers were killed in the clash.

The shootout erupted as police forces raided a house sheltering the suspects in Tarim, which is located some 900 kilometres south-east of the capital Sana'a.

The Defence Ministry on its website quoted unnamed official sources as saying police seized a cache of explosives, including 40 bags of gunpowder, explosive devices, hand grenades, machine guns and gas cylinders. (dpa)