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Now Jaar is in the cross hairs of both U.S. and Saudi counter-terrorism agencies, following Ansar al Shariah's attack on a military base near Zinjibar on the coast about 20 miles (28 kilometers) away. The group seized large amounts of weaponry and took more than 70 Yemeni soldiers hostage. It is threatening to kill its captives unless about 300 al Qaeda members in Yemeni jails are freed.
A video released Monday and translated by the SITE Intelligence Group showed a local leader of Ansar al Shariah addressing some of the bedraggled soldiers.
"Who is managing the security file in Yemen today?" he asks. "It is the Americans. Even the guarding of [President] Abd Rabuh Mansur Hadi, who is responsible for it? It is the Americans," he tells the prisoners.
In recent days, according to local sources, multiple drone strikes have targeted Ansar al Shariah in Jaar (where the group's emir lives) and in neighboring Al Bayda province. Among the dozens killed, they say, were foreign fighters attracted to an area where al Qaeda has freedom to breathe - and plan. One provincial official quoted in Yemeni media said Pakistanis and Egyptians were among those killed.
That fits the assessment of U.S. officials.
"AQAP's (al Qaeda in the Arabian Peninsula's) outreach to Westerners was significantly damaged by the loss of key propagandists in 2011 - especially (Anwar al) Awlaki," said one official. "It isn't giving up on recruiting Westerners, but the focus may shift somewhat to local Yemeni and Middle Eastern audiences."
American-born Al-Awlaki was killed in a U.S. drone strike last year in Yemen.
After the Yemeni army's humiliating defeat in Zinjibar last week, Yemen's new president has vowed to stamp out Ansar al Shariah, and Yemen's air force has also been in action in recent days. But dislodging a group that drew strength from the chaos of the last year in Yemen is proving a tall order. Not least because local tribes - for their own reasons - are providing Ansar al Shariah with shelter and space in which to operate.
Some western counter-terrorism officials fear the development of a Pakistani-style situation in southern Yemen,in which al Qaeda and other extremist groups build a stronghold in remote, tribal areas. Like Ansar al Shariah, the Pakistani Taliban has periodically seized territory, attacked and intimidated local security forces, launched suicide bombings, and taken soldiers hostage.
Unlike the leadership of the Pakistani Taliban, which was drawn from local tribes, most of AQAP's recruits are from urban areas of Yemen such as the capital Sanaa, according to a study published by West Point's Combating Terrorism Center in September. The study found that the group had struggled to win over Yemen's powerful southern tribes.
But al Qaeda appears to be learning. In April 2011, AQAP religious leader Abu Zubayr Adel al Abab announced in an online forum: "The name Ansar al Shariah is what we use to introduce ourselves in areas where we work to tell people about our work and goals."
"Ansar al Shariah is the new face of al Qaeda in the Arabian Peninsula," according to Mustafa Alani, director of security studies at the Gulf Research Center. "It was a way for them to appeal to the religious sense of the tribal leaders and make if more difficult for people to fight against them. It's one thing fighting against al Qaeda and quite another against those trying to bring in Shariah," said Alani, who has extensive contacts inside Saudi counter-terrorism agencies.
The 2011 West Point field study found that "unlike comparisons with al Qaeda in Iraq or Pakistan, AQAP has not attempted to violently coerce support from tribal communities."
"I even say to you that regions far from Abyan wish to be ruled by the Shariah," senior AQAP operative Fahd al Quso told the Yemeni journalist Abdul Razzaq al Jamal in an interview published in February and translated by the SITE Intelligence group.
U.S. intelligence officials have come to the conclusion that the two groups are indistinguishable. For example, videos of Ansar al Shariah's operations have been released by Al Malahem media, AQAP's video production arm.
Noman Benotman, a former Libyan jihadist who is now a senior analyst at the Quilliam Foundation, told CNN last year that he believed al Qaeda leader Ayman al-Zawahiri had persuaded AQAP leader Abu Basir Wuhayshi to rebrand the group to build bridges with the masses in Yemen. Wuhayshi appeared to signal such coordination when he pledged allegiance to Zawahiri in July 2011.
But Alani says Saudi counter-terrorism officials believe AQAP ultimately wants to eclipse al Qaeda's senior leadership in Pakistan as the most powerful node of the international terrorist network.
He says AQAP may have also learned from the mistakes of al Qaeda in Iraq, which tried to hold territory and made itself an easier target. After the attack on the military base in Zinjibar, the Ansar al Shariah fighters quickly made off with weapons and captives rather than try to hold ground.
"(People) are afraid of the (American bombing) that may follow due to our presence. Therefore our presence varies according to the fears of the people," Abu Zubayr said last year.
According to Alani, Saudi counter-terrorism officials believe AQAP's strategy is to create as much ungoverned space as possible in Yemen so that it can better plan attacks in Saudi Arabia, and against the United States. While Yemenis do most of the local fighting, AQAP's cadre of ideologically committed terrorists are building the group's cell structure and a network of safe houses.
Alani says southern tribal leaders are allowing AQAP breathing space in the area as a bargaining chip with the new regime in Sanaa. "The tribes used to have an understanding with the old regime, but with the new one they are not so sure," he said.
In some cases, they have gone as far as supplying the group with fighters.
"The tribes are basically playing a game. They won't allow al Qaeda to operate freely for long. It's basically a way to get their demands: money, projects and power," Alani told CNN.
Earlier this year, Ansar al Shariah fighters agreed to leave the town of Radda - about 100 miles southeast of the capital - after an agreement brokered by local tribal leaders.
But working with al Qaeda is a risky enterprise. Ansar al Shariah's call for jihad to restore Islamic law may resonate in a deeply conservative and economically impoverished region long suspicious of politicians in the capital. And Ansar al Shariah appears to be trying to bring security and services to places like Jaar and Zinjibar.
Casey Coombs, a freelance journalist based in Yemen, is one of the very few westerners to have visited Jaar recently, and has contributed a fascinating photo essay to Foreign Policy magazine.
One photograph shows a framed picture of former al Qaeda leader Osama bin Laden at Jaar's gas station. Metal gas cans sit unattended nearby. This was proof of Jaar's safety, according to one Ansar al Sharia member in the town. "We don't even need to guard the gasoline. It's safe from thieves," he told Coombs.
U.S. officials are watching the situation carefully. "In order to set up a safe haven and get recruits, AQAP needs the cooperation of the southern tribes," one said. "AQAP tries to obtain support through alliances, intimidation, and coercion. Whether this is a recipe for success, or a backlash, time will tell."
"AQAP has two main goals: to attack the West and solidify a safe-haven and extremist state in Yemen," said the official. "There is no doubt AQAP will try to use any space it can carve out to plan external attacks."
On that, at least, there may be agreement between the U.S. intelligence community and AQAP.
One of the group's senior operatives, Fahd al Quso, was asked last month why the group stopped exporting operations to the outside. Was it because all efforts were devoted to an internal project?
"The war didn't end between us and our enemies. Wait for what is coming," Quso replied.
March 13th, 2012 10:07 AM ET
By Paul Cruickshank, Pam Benson and Tim Lister