Yemen has become a major battleground in the war against al Qaeda. This is a change, as for a long time it was suspected that al Qaeda leaders had put a ban on operations in Yemen, in order to keep the local security forces inactive. That way, Yemen could be used as a terrorist hiding place and a transit node for movement into other areas. The last thing al Qaeda wanted was lots of counter-terrorism activity in Yemen. The Yemen government was willing to go along with the al Qaeda "truce", as this is good for the lucrative tourist trade.
But recently al Qaeda has openly proclaimed that it is expanding its operations to Yemen. This can be seen as a sign of desperation, as al Qaeda has failed to pull off any attacks in Saudi Arabia since 2004. There have been several spectacular attacks in Saudi Arabia that were aborted by the security forces. Not surprisingly, most of the Saudi al Qaeda leadership is now outside the kingdom. Apparently those that remain, are now officially fleeing to neighboring Yemen.
Last year, al Qaeda made a major attack on the U.S. embassy in Yemen, and failed to get inside. This was a major loss for the Islamic terrorists, as they not only failed in their attack, but killed many Yemenis in the attempt. This makes the terrorists less popular, and that can soon lead to their demise. This is a pattern that has occurred time and again in the last few decades (in Egypt, Algeria, Saudi Arabia and Iraq).
Even before that September attack, Yemen had been increasingly aggressive in rounding up actual, or suspected, Islamic terrorists. In retaliation, terrorists have set off bombs near the U.S. and Italian embassies, and a housing compound for foreigners, over the last year.
Al Qaeda in Yemen operations had actually peaked in 2000, when a suicide bomber took a boatload of explosives into Aden harbor and badly damaged a U.S. destroyer (the Cole). That attack killed 17 U.S. sailors, and brought down the wrath of Yemeni security forces. For a while anyway. Since September 11, 2001, the pressure has been steady, and hundreds of al Qaeda members and supporters have been arrested or killed. That has thwarted many attacks, and none of the ones that were carried out were as effective as the attack on the USS Cole. On the downside, convicted terrorists have been able to bribe their way out of jail, although they are often recaptured.
One problem with Islamic terrorism in Yemen is that there are many Islamic radical factions, and not a lot of discipline to be found. So futile attacks continue to be the norm. Some Yemeni officials would like to run al Qaeda out of the country. But most officials see this is as impractical. Many Yemenis are quite conservative in their religious beliefs, and tend to agree with al Qaeda. While this is a minority of the population, it is a fanatic one, willing to cause lots of trouble if stirred up.