A local official in Yemen told AFP on Monday that an Iranian military cargo, destined for Shia Zaidi rebels battling the military, had been seized on Sunday and comprised mainly anti-tank shells.

‘This is a media lie,’ Teheran’s Arabic-language Al Alam television reported, quoting unnamed sources who denied an Iranian ship had been seized.

The Yemeni official had said a vessel had been seized off the village of Midi in Hajjah province adjoining Saada, the Yemeni province bordering Saudi Arabia where the insurgency is fiercest.

Speaking on condition of anonymity, the Yemeni official said five Iranians and an Indian were arrested and being questioned by police in the capital Sanaa.

Another local official told AFP that according to the preliminary results of an inquiry, ‘the five Iranians are instructors’ who had planned to deliver the weapons to rebels ‘and evacuate wounded Iranians.’

Sanaa accuses Shia Iran of backing the rebels, who are also known as Huthis after their late commander. The rebels deny the charge.

Last week Yemeni President Ali Abdullah Saleh accused the Huthis of taking money from Iranians and plotting to create a Shia zone along the Saudi borders.

‘These are outlaws and terrorists... who are in the pay of foreign forces and execute a foreign agenda,’ he said, according to the text of a television interview issued on October 19 by state news agency Saba.

‘Their finances come from certain Iranian dignitaries... but we do not accuse the government,’ Saleh said, citing documents seized and confessions of rebels captured during the fighting.

On August 11 the armed forces launched Operation Scorched Earth, aimed at crushing the Zaidi rebels in their Saada region stronghold.

Hundreds of people have been killed or wounded in the clashes, and tens of thousands have been forced to flee their homes, resulting in a humanitarian crisis complicated by a dire shortage of food and other basic necessities.