* Saudis: Yemen unable to control territories outside Sanaa
* Yemen govt's new advisers lack needed tribal links-Saudis
* Yemen fears may impact Saudi involvement in Afghan talks
By Ulf Laessing
RIYADH, Dec 1 (Reuters) - Saudi Arabia sees neighbouring Yemen as a failed state whose President Ali Abdullah is losing control, the kingdom's counter-terrorism chief said, according to a diplomatic cable leaked by whistleblower WikiLeaks.
The Gulf Arab kingdom is worried that al Qaeda's Yemen-based wing is exploiting instability in its impoverished neighbour to stage more attacks inside Saudi Arabia, after Riyadh halted a militant campaign with the help of foreign experts in 2006.
"We have a problem called Yemen," said Prince Mohammed bin Nayef, the son of powerful Interior Minister Prince Nayef bin Abdulaziz, according to a cable written by the U.S. embassy in Riyadh in May 2009.
The prince described Yemen as failed state that is "very, very, extremely dangerous", according to the cable reporting on a meeting of the prince with Richard Holbrooke, senior U.S. envoy for Afghanistan and Pakistan, in Riyadh in May 2009.
The Saudi and Yemeni wings of al Qaeda merged last year to form a regional group based in Yemen which has claimed responsibility for a parcel bomb plot from Yemen.
Yemen's cash-strapped government is not only struggling to curb a resurgent al Qaeda wing, it is also trying to cement a shaky truce with rebels in the north and suppress a separatist rebellion in the south.
Saudi Arabia is bankrolling the government of its veteran ally President Saleh and gives a great deal of security assistance to Sanaa, but both sides decline to say how much.
"The Saudis would like Saleh to be a strong leader ... but his vision of Yemen has shrunk to (the capital) Sanaa, and he was losing control over the rest of the country," said the cable, which was cleared by Holbrooke himself.
Saudi Arabia also felt that with Saleh's old advisers gone, he was relying on his son and other younger officials who do not have good contacts with the tribes that dominate much of Yemen, the cable said.
CONCERNS OVER AFGHANISTAN
Saudi Arabia's anxieties about Yemen could complicate efforts towards reaching a settlement with the Taliban in Afghanistan, which would require the movement to break its ties with al Qaeda and force the organisation to leave the region.
Security analysts say al Qaeda's core leadership will try everything it can to keep its safe haven along the Afghan-Pakistan border, but some say it could consider moving elsewhere, possibly to Yemen, if the situation became untenable.
A senior Pakistani politician, who is sympathetic to the Taliban, told Reuters last week that a political settlement would squeeze the room for al Qaeda, who would have to "fall in line or leave the region". [ID:LDE6AO1TZ]
Pakistan's Dawn newspaper also quoted a senior military official this week as saying that there "are indicators that the parties to the conflict in Afghanistan can renounce al Qaeda and ask it to leave Afghanistan".
Official sources from different countries have said that insurgents and other stakeholders in the war have already held "talks about talks" on how to reach a settlement in Afghanistan, although they described the process as preliminary.
However, what appeared to be a separate set of talks which U.S. officials had said were held in Kabul ended after a man believed to be a Taliban leader turned out to be an imposter, U.S. newspapers said. (Additional reporting by Myra MacDonald; editing by David Stamp)
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