* Four Saudi soldiers killed in clash near Yemen border
* Yemen security forces kill 19 rebels in north
* Yemen starts talks with kidnappers of German family
By Souhail Karam and Mohammed Ghobari
RIYADH/SANAA, Jan 12 (Reuters) - Hundreds of Yemeni Shi'ite infiltrators have been slain in border clashes, a top Saudi defence official said on Tuesday, after state media said four Saudi soldiers were killed in the fighting with the rebels.
Separately, Yemeni forces killed 19 rebels in sweeps to rid the old city of a north Yemeni town of Shi'ite rebel hideouts, Yemen's Interior Ministry said. About 25 rebels were arrested.
Yemen, the Arab world's poorest nation, came to the foreground of U.S.-led efforts to battle militancy after a Yemen-based wing of al Qaeda said it was behind a failed Dec. 25 plot to bomb a U.S.-bound airliner.
Saudi Arabia launched its assault on Yemen's Shi'ite Muslim rebels, known as Houthis, in the area near its border with Yemen in November after the insurgents killed two Saudi border guards in a cross-border incursion.
The latest deaths brought to 82 the number of Saudi troops killed in the border conflict with Yemeni Shi'ite rebels, state television said. On Dec. 22, Riyadh said 73 troops had been killed in the fighting.
Saudi state television, citing Assistant Minister of Defence Prince Khaled bin Sultan, reported that Yemeni rebel infiltrators had been given an ultimatum to leave the al-Jabri area where the border post is located within 48 hours.
"They did not comply ... All of them have been destroyed," he said.
"The infiltrators inflicted upon themselves hundreds of deaths," he told the television.
The United States and Saudi Arabia fear al Qaeda will take advantage of Yemen's instability to spread its operations to the neighbouring kingdom, the world's top oil exporter, and beyond. Yemen itself produces a small amount of oil.
Saudi Arabia has repeatedly said it has gained the upper hand in the conflict with the Yemeni rebels, but fighting has continued. Rebels, who say Saudi planes often bomb their areas, have rejected Saudi claims of success in the ground fighting but say many civilians have been killed.
Yemen said that its operation against the rebels, dubbed "Blow to the Head", was continuing. The rebels have fought the government since 2004, complaining of social, economic and religious marginalisation.
Yemen also faces separatist sentiment in the south and is fighting a resurgent al Qaeda in several provinces. Security forces chasing al Qaeda militants in Shabwa province arrested four suspects after a clash, a security official said.
Security forces were engaged in a clash with about 10 people who had fled to the house of a suspected al Qaeda militant, the official told Reuters.
TALKS WITH KIDNAPPERS
The rebels, members of the minority Shi'ite Zaidi sect, have said they were the target of Saudi air strikes in recent days, and that their positions were often pounded by Yemeni mortars.
Rebel leader Abdul-Malik al-Houthi said civilians were being targeted as a means of pressing rebels to end their fight.
"It is clear, brothers, that the enemies made the targeting (of) civilians a basic strategy, and are trying through that to pressure us," Houthi said in a statement posted on a rebel website.
He cited a series of strikes in December that he said killed more than 50 women and children, and said civilians had been attacked previously in their homes, markets and mosques by U.S., Saudi and Yemeni planes in what he termed "joint aggression".
"I call on you again to stop targeting civilians and stop your crimes against women and children. If you have a desire or intent to fight us ... then fight us with honour so as to retain a minimum of your humanity," Houthi said.
The conflict in Yemen's mountainous north has killed hundreds and displaced tens of thousands.
Yemen has also started talks with kidnappers holding a German family of five and a Briton, a Yemeni minister said.
"The negotiations are now going on with the kidnappers of the German and British hostages," Foreign Minister Abubakr al-Qirbi told a news conference.
German Foreign Minister Guido Westerwelle said in Sanaa on Monday that Yemeni authorities had located the German couple and their three children.
Most foreigners abducted by Yemeni tribal groups to press the government to meet local demands have been freed unharmed. But gunmen killed two Belgian women in 2008 in an ambush authorities blamed on al Qaeda.
The German family and the Briton were among a group of nine foreigners kidnapped in the northern province of Saada, where Shi'ite rebels are fighting government troops. The rebels have denied they were responsible.
Three women from the group -- two Germans and a South Korean -- were later found dead.
Germany's mass-selling Bild newspaper cited an unnamed government official on Dec. 23 as saying the German government had received a video which showed the three children, aged between one and five years, alive but looking exhausted. (Reporting by Mohamed Sudam; writing by Cynthia Johnston; Editing by Jon Boyle)
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