* Saudi war aimed to stop Iran gaining strength

* Riyadh says campaign may be in final phase

* Hardest fighting still to come if Sanaa to be taken

* Local allies divided

By Angus McDowall

RIYADH, Nov 2 (Reuters) - In Yemen's humid southern port of Aden, Saudi Arabian soldiers in armoured cars patrol streets where jihadists lurk. In Marib, east of the capital Sanaa, they fight alongside tribesmen in the hills. From the skies above, their jets fire down missiles.

Saudi military involvement in Yemen would have been unthinkable even a year ago, but with a new leadership and in the crucible of a region-wide struggle with Iran, Riyadh abandoned decades of backroom diplomacy for armed adventure.

It began six months before Russia's intervention in Syria on the other side of the Iranian-Saudi divide, but decades of instability in Yemen, isolated at the southern end of the Gulf peninsula, means it has attracted far less attention.

Riyadh is now immersed in a campaign that seems to be hinged on an early surrender by its foes. Its allies are weak and divided and the outcome of the conflict will go a long way towards determining its future role in the Middle East.

"The military option was the last one for Saudi Arabia and came via a request from the legitimate government and to protect Saudi citizens from ballistic missiles," Saudi Foreign Minister Adel al-Jubeir said last week.

Saudi Arabia entered the war citing Iranian interference in its southern neighbour, denied by Tehran, via Houthi militia who swept out of their northern stronghold last year, and because of perceived American disengagement in the region.

The Saudis aim to restore the internationally recognised government of Abd-Rabbu Mansour Hadi, who fled to Aden before the city was besieged by the Houthis and forces loyal to former president Ali Abdullah Saleh, triggering the Saudi campaign.

Saudi Foreign Minister Adel al-Jubeir said on Saturday he thought the campaign may be nearing its end because of coalition gains and Saleh and the Houthis' willingness to talk. It was the latest in a series of Saudi predictions the intervention would be over quickly, and a Western official said it was optimistic.

VANGUARD

Outside a dusty Gulf military base on the outskirts of Aden, four armoured cars bearing the kingdom's flag paraded around a muddy field during a recent visit by journalists. Soldiers in robes watched television in an air-conditioned hut while barefoot Yemeni labourers lugged rocks for a new building.

The soldiers are in the vanguard of the foreign policy pursued by King Salman since he took power in January, a policy often described as "assertive", and which hawkish Saudis hope will eventually roll back Iranian influence around the region.

It is a policy evident in the transformation of Sharura, a remote outpost of settled Bedouin deep in the desert, into a busy military waystation, with Apache and Chinook helicopters on the runway, high pink dunes rising in the distance behind them.

Success in Yemen may encourage Salman and his ambitious son, Defence Minister Mohammed bin Salman, to step up intervention in other conflicts like Syria.

Failure will make it harder to reassemble the coalition of Arab states that has supported it in its southern neighbour.

Inside Aden, a thin young man with an assault rifle raised two fingers in a languid V for victory as a Gulf armoured vehicle rounded a street corner, a sight familiar to Saudis from news bulletins showing Yemenis welcoming the coalition.

Saudi Arabians have been buoyed by the taking of Aden in July, and their relatively low number of casualties - a few dozen soldiers and border guards and a handful of civilians killed in cross-border shelling.

But the worst fighting may be to come.

Even in retaking areas where local people supported the coalition, inexperience has shown: security lapses allowed jihadist suicide bombers to hit three major coalition targets in Aden, and billeting troops too close together led to high casualties when a missile hit a base near Marib.

At that airbase, the floor of a large white tent, used as a field hospital after the missile strike killed more than 60 Gulf soldiers, was still littered with medical debris including latex gloves and blood-stained plasma bags weeks after the blast.

The only soldiers Reuters saw there in a visit to Yemen last month arranged by the Saudi armed forces were Yemeni. Gulf forces remained in Marib, but had been dispersed to separate camps for their own safety, a Saudi officer said.

The coalition has not pushed far into highland areas where the Houthis enjoy greatest support, and where the terrain favours those holding it.

Artillery fire could be heard in Marib from the hills to the west, areas vital to the recapture of the capital Sanaa. Yemen's rugged highland terrain still provides cover for constant Houthi attacks on Saudi frontier positions and distant blasts were also audible to Reuters on separate trips to the border.

Diplomats say Riyadh appears to hope the military pressure, which has tacit support from the U.S. France and Britain, will force the Houthis and Saleh to sue for peace without the coalition and its local allies having to reach the capital.

The war has already cost billions of dollars. It would be hard to sustain even if Riyadh's oil revenues were not hit by stagnant crude prices and would skyrocket with any escalation.

So far, despite the presence of several thousand Saudi and Emirati troops in Yemen at times during the war, their use of more ground troops seems unlikely. The arrival of Sudanese troops in Aden this month underlined Riyadh's desire to keep a light footprint.

That policy has also meant a reliance on local fighters, but they are often untrained and engaged in the war not because of their support for Hadi, but for tribal or religious reasons.

In Aden, the only Yemeni flag on obvious display in the city was in the temporary seat of government at the Qasr Hotel, days before it was hit by a jihadist suicide bomb. Hundreds of other flags represented a longstanding southern separatist movement.

In Marib, Sunni Muslim fighters used virulently sectarian language to describe the Shi'ite Houthis.

Even Hadi's government, based in the fraying splendour of Riyadh's 1970s Guest Palace since March, is divided between partisans of the president and those of his vice president, Khaled al-Bahah.

Meanwhile, outside Saudi Arabia, the ghastly human toll of the conflict, from a naval blockade that has pushed Yemen to the brink of famine, and civilian deaths blamed by local people on coalition bombing, has made Riyadh's Western allies queasy.

So far, the United Nations estimates at least 2,400 civilians have been killed. Many more are destitute: on a street in Aden with buildings punctured with shell holes, a woman in a black robe sat begging, a baby in a pink blanket on her lap.

(Editing by Philippa Fletcher) ((angus.mcdowall@thomsonreuters.com; Reuters Messaging: angus.mcdowall.thomsonreuters.com@reuters.net))

Keywords: YEMEN SECURITY/SAUDI