Yemen appeals for calm after price riots kill 13
By Mohammed Sudam

SANAA, July 20 (Reuters) - Yemen's prime minister called for calm on Wednesday after 13 people were killed in clashes between police and rioters protesting a sharp rise in fuel prices.

"I ask the people to calm down, we are improving your conditions. We must differentiate between freedom of expression and freedom of destruction, which is completely rejected," Prime Minister Abdul-Qader Bagammal said in a television address.

"We are not accusing anyone but we call those infiltrating the masses to stop harming society. They are the true saboteurs and we will confront them," he said without elaborating.

It was the government's first response to riots sparked by a state decision to cut fuel subsidies that nearly doubled prices.

An Interior Ministry official said an unspecified number of protestors were arrested, Saba news agency said.

Yemen, which announced the cuts on Tuesday, said they were in line with high global oil prices and were part of reforms launched in 1995 and backed by the International Monetary Fund and World Bank, to help prevent an economic collapse.The government also said on Tuesday it would cut custom tariffs, raise state salaries and lower a general sales tax it would introduce to 5 percent from a planned 10 percent.

Thousands of protesters in the capital, Sanaa, smashed government offices, blocked roads by setting tyres on fire, and knocked out electricity transformers in some areas.

The clashes were the heaviest death toll in Yemen protests since 1998, when 34 people died in two weeks of demonstrations and violent clashes over price hikes.

Rioters wrecked stores and cars before anti-riot police deployed to stop the violence. Police fired shots in the air and used tear gas to disperse protesters hurling stones at Bagammal's offices and ambulances rushed injured to hospital.

But it was not clear if the casualties were caused by police who opened fire at the protesters or by armed demonstrators in a country where civilians often carry arms.

Witnesses and medics reported similar protests in three other towns, including the southern town of Dhala where seven of the 13 dead were killed, including one policeman.

"This is a natural reaction because the government's reforms are a lie and we can't take it any more... This government is making the rich richer and the poor poorer," one man said.

AILING ECONOMY

Analysts said the riots posed a challenge to the government of President Ali Abdullah Saleh struggling to prevent a collapse of a debt-ridden economy with high unemployment and poverty.

"What happened today was a spontaneous reaction by the people who feel targeted in their livelihood. Such riots will hurt the country's stability," said analyst Saeed Thabet.

Demonstrators shouted slogans attacking the ruling party. Police, using tear gas and water cannon, blocked off Vice President Abd-Rabbu Hadi's house where protesters converged.

Bagammal has said the government wants to cut $500 million a year of diesel subsidies as part of reforms.

A litre of diesel rose to 45 rials (24 U.S. cents) from 17 rials; a litre of petrol was priced at 65 rials, up from 35 rials, and a litre of kerosene rose to 45 rials from 16 rials. Gas cylinders rose to 400 rials from 250 rials.

Yemen said the hikes are in line with high global oil prices.

Opposition parties said the measures put more pressure on the poor and demanded instead a crackdown on corruption and high state expenditures, which they blame for economic problems.

"We call on the authority to rescind this destructive measure... Any reform must include combating corruption," the opposition Yemeni Socialist Party said in a statement.

Mohammed al-Rabaai, secretary-general of the Popular Forces Union, criticised IMF and World Bank reforms. "Succumbing to agencies and organisations without considering Yemenis' conditions negatively impacts people's lives and the economy."

World Bank figures show more than 42 percent of Yemen's 19 million people live below the poverty line, with illiteracy estimated at 50 percent and unemployment at over 20 percent.