Sana'a, Yemen- Yemeni President Ali Abdullah Saleh said on Wednesday that Shiite rebels in the restive province of Saada should respect the ceasefire reached with the army earlier this month or they would face a new military campaign.

"The war in Saada has ended, and we hope that group would abide by the ceasefire and leave mountains," Saleh said in a speech during a ceremony for university graduates in Sanaa.

"Otherwise, we have a new way (to deal with them), not like the ways we used to apply in the past weeks and months," Saleh said, without giving further details.

He said the rebel fighters "are allowed to return to their villages as good citizens who live under the constitution and laws."

On July 17, Saleh announced the end of the battles between the army and Shiite rebels in the north-western province of Saada, saying "it will never resume."

Tribal sources in Saada, some 230 kilometres north of Sana'a, said mediation led by tribal chieftains was behind the breakthrough in the crisis.

Government officials have said the rebels launched several attacks on army positions after the ceasefire went into effect.

The ceasefire was based on an agreement signed by the rebels and Yemeni government in Doha in June 2007, official sources said.

Under the Qatari-sponsored agreement, rebels should vacate their locations in mountains of Saada and hand over their medium and heavy weapons to the government, while the government in turn would release detained rebels.

The deal also provides that the rebel leader Abdul-Malik al-Houthi and his two brothers, Yahay and Abdul-Kareem, would be allowed to live in exile in Qatar.

Saada, a remote mountainous province located the border with Saudi Arabia, has been the scene of fierce fighting between Shiite rebels loyal to the outlawed Believing Youth group, known as Houthis, and government forces since mid-2004.

Waves of violent clashes have since left hundreds of government troops and rebels dead, and displaced thousands of civilians from the restive province.

Authorities have accused the rebels of trying to reinstall the imamate rule that was toppled by a republican revolution in northern Yemen in 1962.

Houthis, who belong mostly to the moderate Zaidi sect of Islam, say they were only defending their areas from army offensives.

The conflict began in mid-2004 after Shiite cleric Hussein al- Houthi, the elder brother of the current rebel leader Abdul-Malik al- Houthi, established the Believing Youth movement and organized a series of protests in Sana'a and other major cities to voice their slogan "Death to America ... Death to Israel."

Hussein was killed by the army in September the same year after months of bloody fighting with government forces. (dpa)