SANAA, (Reuters) - Yemen said on Friday it had killed three rebel leaders in fighting in the north, while the Shi'ite rebels accused Saudi Arabia of backing the government.

"Three terrorist rebel leaders met their deaths in an army operation in the Malahidh area of Saada province," a military statement said, naming the men killed on Thursday as Jarallah Mohammed Ismail, Ali Abd-Rabbo Jabal and Abdelaziz al-Uraimi.

The statement said the army had deployed a unit of snipers in the mountainous territory bordering Saudi Arabia, the world's biggest oil producer and a strong ally of Yemen.

Last month fresh fighting erupted between Zaydi Shi'ite Muslims in the Saada region and government forces trying to impose central authority. The conflict first broke out in 2004.

The rebels issued a video of mortars that bore Saudi emblems, seized from an army unit. An earlier video recording appeared to show government troops captured in the Maran region.

"We are placing before everyone the fact of direct Saudi support that we have talked about," a rebel statement issued on Thursday said.

"The regime has ceded sovereignty ... and delivered the country to foreign interests."

The rebels accuse Saudi Arabia, whose Wahhabi Islam regards Shi'ites as virtual heretics, of backing the government, while the government sees an Iranian hand behind the rebels.

Sanaa says the rebels want to restore a Shi'ite state overthrown in the 1960s and last week summoned the Iranian ambassador over Iranian media's coverage of the fighting.

The group wants more autonomy, and opposes the spread of Saudi-influenced Sunni fundamentalism and the ruling party of veteran Yemeni President Ali Abdullah Saleh, who visited Saudi Crown Prince Sultan in Morocco this week.

Saudi Arabia is worried the instability in Yemen, which also faces al Qaeda violence and a southern secession movement, could allow militants to revive operations in Saudi Arabia.

The government denied the charges of Saudi involvement.

Information about the conduct of the war has been hard to verify since northern provinces have been closed to media.

More than 100,000 people, many of them children, have fled their homes during the surge in fighting, a U.N. agency said last month.

U.N. agencies have launched an appeal in Geneva for $23.5 launched to help Yemen.