- Offensive against al Qaeda in three provinces
* U.S. embassy reopens; British, French missions resume work
* U.S. to hold off Guantanamo prisoner transfers to Yemen (Adds White House statement on Guantanamo prisoners)
By Mohamed Sudam and Mohammed Ghobari
SANAA, Jan 5 (Reuters) - Thousands of Yemeni troops are hemming in al Qaeda militants in three provinces, security sources said on Tuesday, and the U.S. embassy in Sanaa reopened after security forces staged a raid just outside the capital.
The British and French embassies also resumed operations but remained closed to the public, diplomats said.
Yemen, the poorest Arab country, was thrust into the foreground of the U.S.-led war against Islamist militants after a Yemen-based wing of al Qaeda said it was behind a Christmas Day attempt to bomb a U.S.-bound plane.
U.S. Secretary of State Hillary Clinton has said fighting in Yemen is a threat to regional and global stability.
Yemen has sent thousands of troops to take part in a campaign against al Qaeda in three provinces over the past three days, and five suspected fighters from the group were detained, the security sources said.
"The campaign is continuing in the capital and in the provinces of Shabwa and Maarib," one source told Reuters on condition of anonymity. The manhunt also was going on in the southern province of Abyan.
Five al Qaeda fighters were arrested in raids on homes in which they were hiding, the source said.
The U.S. embassy in Yemen said it reopened after a raid that killed two al Qaeda militants dealt with specific security concerns which had forced U.S. and European missions to close.
"Successful counter-terrorism operations conducted by Government of Yemen security forces ... have addressed a specific area of concern, and have contributed to the embassy's decision to resume operations," the U.S. embassy said.
It said in a statement that the mission, a fortified structure with concrete slabs to guard against attacks, had closed for two days on credible information of the "likelihood of imminent terrorist attacks in the Yemeni capital".
GUANTANAMO TRANSFERS
In Washington, the White House said the United States would hold off for now transferring any more prisoners from the U.S. military prison at Guantanamo Bay, Cuba, to Yemen.
"While we remain committed to closing the (Guantanamo) facility, a determination has been made right now -- any additional transfers to Yemen is not a good idea," said White House spokesman Robert Gibbs.
Placed strategically on the Arabian Peninsula's southern rim, Yemen is trying to fight a threat from resurgent al Qaeda fighters while a Shi'ite revolt rages in the north and separatist sentiment simmers in the south.
In the southern port city of Aden, a guard at independent daily Al Ayyam was killed in a confrontation with security forces during a sit-in at the newspaper building, residents and news websites said. The West and Saudi Arabia fear al Qaeda will take advantage of Yemen's instability to spread its operations to the neighbouring kingdom, the world's biggest oil exporter, and beyond. Yemen is a small oil producer.
Yemen increased security measures around embassies and residential areas where foreigners live, state media said. Twin suicide car bombs killed 16 outside the U.S. mission in 2008.
On Monday, Yemeni forces killed at least two al Qaeda militants they said were behind threats that forced embassies to close, and President Ali Abdullah Saleh said Yemen would defeat anyone thinking of harming the country and its security.
Yemen, with shrinking oil reserves, a water crisis and fast-growing population, had already stepped up security on its coast to block militants from reaching its shores from Somalia.
"Nevertheless, the threat of terrorist attacks against American interests remains high and the embassy continues to urge its citizens in Yemen to be vigilant and take prudent security measures," the U.S. mission said.
Yemeni officials acknowledge the need for U.S. help with counter-terrorism, but say the government also lacks resources to tackle the poverty that widens al Qaeda's recruiting pool.
ALTERNATIVE AL QAEDA BASE
Defence and counterterrorism officials say Washington quietly has been supplying military equipment, intelligence and training to Yemen to root out suspected al Qaeda hide-outs.
The Christmas Day bombing attempt has put a spotlight on the growing prominence of al Qaeda in Yemen and the expanding role of the U.S. military and spy agencies in fighting the group.
Civil war and lawlessness have turned Yemen into an alternative base for al Qaeda, which U.S. officials say has been largely pushed out of Afghanistan and is under military pressure from the Pakistani army in bordering tribal areas.
Yemen has been a long-standing base of support for al Qaeda. Militants bombed the Navy warship USS Cole in the Yemeni port of Aden in 2000, killing 17 U.S. sailors. Yemenis were one of the largest groups to train in al Qaeda's camps in Afghanistan before the Sept. 11 attacks in 2001.
Violence also flared in the Yemen-Saudi border area, where Shi'ite rebels waging a revolt against the central government said a series of Saudi air strikes on a market had flattened shops and homes, killing two people and wounding three more. Shi'ite rebels from the Zaidi sect in northern Yemen have fought government troops since 2004 in a conflict that has killed hundreds and displaced tens of thousands, complaining of social, economic and religious marginalisation.
The conflict drew in Saudi Arabia in November when rebels made a cross-border incursion into the world's top oil exporter.
(Additional reporting by Mohammed Mokhashef in Aden, Cynthia Johnston in Dubai and Jim Loney in Baghdad; Writing by Cynthia Johnston and Firouz Sedarat; Editing by Michael Roddy)