But the resurgence of the group in this sprawling, rugged nation on the Arabian Peninsula has divided U.S. analysts.

Some experts say there is little more the government there can do to dismantle the group's networks. Its grip over many regions outside the capital, Sanaa, is tentative at best, and a tribal-religious insurgency in the north threatens even that.

And some argue the United States needs to make greater use in the country of so-called soft power -- aid and democracy-building programs -- to balance the counter-terrorism training and equipment it is supplying.

But others say that Yemeni President Ali Abdullah Salih lacks the political will to tackle the problem of terror networks head on, and judge there is more his government could do to catch and jail al-Qaida and other extremists at large in the country.

Steven Heydemann, a Yemen expert and special adviser to the Muslim World Initiative at the U.S. Institute of Peace, said Wednesday's attack would likely trigger "another round of an ongoing conversation" that U.S. officials have been having with their counterparts in Sanaa for many years.

The Sanaa government "recognizes that there is some popular support (for Islamist extremists), that these groups have influence, that some (members and leaders) have links to important families," he told United Press International.

Heydemann said the authority of the government was "heavily based on patronage and clientelism" -- a delicate network of traditional relationships of tribal and other obligations that could easily be damaged if the government overreached, especially militarily.

Yemen's security apparatus was simply "not able to systematically and comprehensively repress these (Islamist extremist) forces �� in the way the United States would like."

A four-year insurgency based in Saada, in the north near Yemen's border with Saudi Arabia, has displaced more than 100,000 people, said Heydemann.

Gregory Johnsen, an analyst with the Washington think tank the Jamestown Foundation, said the insurgency -- by Shiite fighters under tribal leadership -- was much higher on Salih's list of priorities than the fight against al-Qaida.

Al-Qaida, he said, was seen in Sanaa as "a security threat, but not as serious as the insurgency �� not existential."

Johnsen said: "There is more (Salih's government) could do. �� There's a lack of political will."

In February 2006 more than 20 Yemeni extremists escaped from a high-security jail -- a breakout some U.S. officials believe Salih's government was complicit in at some level.

The breakout heralded a resurgence of al-Qaida activity in the country and became a poster child for critics who saw Salih as too soft on the group.

Heydemann said Wednesday's attack might "signal to the (Yemeni) government that it is time to reassess the somewhat ambiguous stance they have taken towards" Islamist extremists.

"Even in Yemen there are red lines," he said, "and blowing yourself up in front of an embassy and shooting at military personnel definitely crosses them."

But he added, given the capabilities available to Salih and his need to maintain the alliances required to stay in power, "a crackdown is likely to be temporary" and "politically difficult." It also could be "counterproductive," Heydemann cautioned.

Johnsen said the Salih government's stance toward the group was also a product of a strategy, an effort to split an older generation of extremists away from their younger brethren. "There's some evidence that may have worked," he said.

"Things often do not work in Yemen the way the U.S. government expects them to," he said.

Karin Von Hippel of the Center for Strategic and International Studies told UPI that the United States needs to make greater use of soft power in Yemen.

"We need to beef up our democratization programs," supporting the development of political parties and other civil society institutions, she said, "and do more social service provision with the government." She called for more "basic development in the countryside."

"We're spending very little money in Yemen," she said of U.S. aid programs, adding that any counter-terrorism policy had to address "the extreme poverty" in parts of the country.

Her colleague at CSIS, Ethan Chorin, agreed, adding Yemen's neighbors could also help. "Clearly a stronger economy and more regional integration would help the cause of security and stability, in this, one of the poorest countries in the region."

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