SANAA:Yemeni troops backed by tanks attacked an al Qaeda stronghold on Monday after talks to free three Western hostages collapsed, an official and residents said, leading to a retaliatory militant raid that killed three soldiers.

Tackling lawlessness in the impoverished Arabian Peninsula state, which flanks the world's biggest oil exporter Saudi Arabia, is an international priority. The United States views Yemen as a frontline in its struggle against al Qaeda.

A Finnish couple and an Austrian man, who were studying Arabic in Yemen, were snatched last month by tribesmen in the capital Sanaa. They were later sold to members of al Qaeda in the Arabian Peninsula (AQAP), and transferred to the southern al-Bayda province, a Yemeni official told Reuters earlier this month.

A separate government official said the army began its Monday offensive after AQAP rejected demands to release the hostages.

Residents said they saw dozens of tanks and armoured vehicles moving at dawn towards al Qaeda's al-Manaseh stronghold in al-Bayda.

"A few hours later, army forces started shelling. We could hear explosions," a man who gave his name only as Abdullah told Reuters by telephone.

Militants retaliated by attacking a military checkpoint in Radda, a town near al-Manaseh. At least three soldiers were killed and 10 wounded in the attack, medical sources said.

The kidnapping of Westerners occurs sporadically in Yemen, mostly by tribesmen seeking bargaining clout in disputes with the authorities or by al Qaeda militants.

Washington and other Western governments regard AQAP, which has planned attacks on international targets including airliners, as one of the most dangerous offshoots of the global militant network founded by Osama bin Laden.

There have been dozens of killings of security and military officials by suspected al Qaeda gunmen in the past year, suggesting AQAP remains resilient despite increased U.S. drone strikes and an onslaught by government forces.