By Mark Hosenball, Phil Stewart and Matt Spetalnick
WASHINGTON (Reuters) - The United States is facing increasing difficulty acquiring intelligence needed to run its stealth drone program in Yemen, undermining a campaign against the most lethal branch of al Qaeda after Houthi rebels seized control of parts of the country’s security apparatus, U.S. officials say.
Gaps in on-the-ground intelligence could slow America's fight against a resurgent al Qaeda in Yemen and heighten the risk of errant strikes that kill the wrong people and stoke anti-U.S. sentiment, potentially making the militants even stronger in areas where al Qaeda is already growing.
Iran-backed Houthi rebels have taken up positions in and around several defense and intelligence installations whose teams had previously cooperated with Washington, cutting off key sources of information for drone-missile attacks, the officials told Reuters.
Turmoil in the wake of last week's collapse of a U.S.-backed Yemeni government after days of clashes in the capital Sanaa, has already forced the U.S. State Department to reduce staff and operations at the U.S. Embassy.
U.S. officials told Reuters last week that Washington has also halted some counter-terrorism operations, but described the measures as temporary.
The turmoil has also cast doubt over the future of a key partnership for Washington in the fight against al Qaeda in the Arabian Peninsula, or AQAP. Only last September President Barack Obama touted cooperation with Yemen as a model in counter-terrorism.
AQAP claimed responsibility for shootings this month in Paris that killed 17 people and has been accused of plotting attacks against American interests.
The crisis in the Arab world's poorest country threatens to create a power vacuum that could allow AQAP to expand, while pushing Yemen toward a broader conflict between majority Sunni Muslims and minority Shi'ite Houthis, who are hostile to both the United States and al Qaeda.
U.S. officials said training of Yemeni special forces had ground to a halt in the capital, though some joint activities were continuing in the Sunni-controlled south.
Many U.S. personnel remain in place with Yemeni government forces at the southern al-Anaad air base, an intelligence post for monitoring the Al Qaeda group.
Stephen Seche, who served as U.S. ambassador to Yemen from 2007 to 2010 and now works in Washington at a law firm, said, however, he expected collaboration between U.S. and Yemeni intelligence services to suffer.
"If there’s no leadership, there’s no clear direction, there’s no real motivation to do that,” he said.
The White House and the Pentagon have said counter-terrorism efforts in Yemen will be undeterred by turmoil in the country.
"We do continue to have an ongoing security relationship with the national security infrastructure in Yemen. Some of which, much of which, is still functioning," White House spokesman Josh Earnest told reporters.
Some U.S. officials, however, privately say the reduced intelligence sharing could undermine the armed-drone program.
Information has dried up from Yemeni security offices in Sanaa and there has been less cooperation from local security services outside the capital, the officials told Reuters, speaking on condition of anonymity.
Houthis have erected checkpoints at entrances at security institutions and have stationed operatives inside, Yemeni officials say. Rebels also surround the homes of the defense minister and the head of the National Security Bureau.
U.S. authorities treat some Yemeni intelligence leads with skepticism, concerned local officials might be trying to settle scores, and typically seek corroboration from multiple sources, the officials said.
But they will now be forced to rely more on surveillance drones, spy satellites and electronic eavesdropping, as well as their own "human intelligence" sources on the ground, said one official with direct knowledge of the operations.
Seeking to stabilize the country, Washington has signaled at least limited contacts with the Houthis, who oppose the American drone campaign but are also enemies of al Qaeda.
“As a new part of Yemen's leadership, the Houthis will have many reasons to talk with the international community,” said White House spokesman Alistair Baskey. He cited the need for security assurances for diplomats and to “articulate their intentions” on the country's political transition, but insisted there was no U.S. intelligence sharing with the Houthis.
With little prospect of collaborating with the Houthis, Washington will also face trouble mounting raids on al Qaeda hideouts similar to those carried out in the past by U.S.-trained Yemeni special forces working close with U.S. officials.
The United States will maintain some security cooperation in southern Yemen, an al Qaeda stronghold and where former president Abd-Rabbu Mansour Hadi retains some support, even while the rebels control the capital and much of the north, the officials said.
The U.S. officials added that they can continue drone strikes such as Monday’s attack on a car in eastern Yemen that killed three men believed to be al Qaeda militants, including one identified as a youth by a Yemeni rights group.
The Central Intelligence Agency, which conducts the bulk of drone operations in Yemen, has no drone bases on Yemeni soil but operates from Saudi Arabia and Djibouti, U.S. officials say.
They also insist that while “collateral damage” is always a risk in counter terrorism operations, they do the utmost to avoid civilian casualties.
"There must be near-certainty that no civilians will be killed or injured – the highest standard we can set," Baskey said.
Nineteen U.S. drone strikes killed 124 militants and four civilians in Yemen in 2014, according to the New America Foundation, which maintains a database of drone operations.
(Additional reporting by Yara Bayoumy in Dubai and Warren Strobel in Washington; Writing by Matt Spetalnick; Editing by Jason Szep, Tomasz Janowski and Jeremy Laurence)