Saudi troops exchanged fire with snipers from Yemen Shi'ite rebels who have crossed over the border, a Saudi military source said on Sunday, days after the rebels said they had withdrawn from Saudi land.

Saudi Arabia declared victory over Yemeni Shi'ite rebels on Wednesday following a ceasefire offer from the rebels.

The world's top oil exporter was drawn into a conflict between Yemen's government and the rebels in November, when Riyadh launched a military assault against the insurgents after they seized some Saudi territory.

'The snipers are still present,' a Saudi military source told Reuters, adding that exchange of fire was happening on a daily basis. 'These people cannot be trusted, every day they creep in and out, but they do not really pose a threat,' he said.

Yemen, which earlier this month declared an open war on al Qaeda and is struggling to contain a secessionist movement in the south, has been fighting the rebels on and off since 2004 but the conflict intensified last summer.

Rebel leader Abdul-Malik al-Houthi said on Saturday he was prepared to accept government conditions for a truce, which include removal of rebel checkpoints and clarification on the fate of kidnapped foreigners, but the authorities have yet to give an official response.

The growing instability in Yemen is a worry to Western powers, who fear the country could become a failed state, allowing Al Qaeda to strengthen its operations there.

Britain hosted talks on Yemen in London last week after an attempt to bomb a plane on December 25 on its way to Detroit drew the world's attention to al Qaeda in Yemen.-Reuters