SANAA: Eight people were killed in fighting between Sunni Muslim Salafis and Shia Muslim rebels in northern Yemen on Saturday, a local official said, the latest flare-up of sectarian tension in the impoverished state.

Shia rebels known as Houthis have exploited a year of political upheaval in Yemen to effectively carve out their own state within a state in the rugged province of Saada, which lies along the border with Saudi Arabia.

The Houthis have fought regularly with Salafis attending a religious college in the area. They accuse Riyadh of smuggling weapons to the Salafis because the two follow a similar creed.

The official said the confrontation took place on the outskirts of Saada city, when four Salafi students ventured up to a checkpoint manned by the Houthis. Four people died on either side and each blamed the other for firing the first shot.

Salafis view Shia as heretics.

Saudi Arabia briefly fought the Houthis in north Yemen after they grabbed Saudi territory in 2009.

The US envoy to Yemen said earlier this year there were signs that Shia Iran was becoming more active in Yemen, posing a threat to the country's security and stability. Iran denies interfering there.

Saudi Arabia, a close US ally, says Iran is fomenting unrest among Shia in its east and in neighbouring Bahrain.

Rebellion in the north is just one of a host of challenges facing President Abd-Rabbu Mansour Hadi, who replaced Ali Abdullah Saleh after months of anti-government protests that paralysed the Yemen government for most of 2011.

Apart from a looming humanitarian crisis, the south of the country is home to rising secessionist sentiment and a tenacious arm of al Qaeda, which has launched a string of deadly attacks on the army since Hadi took office.