October 12, 2000: Bombing of the USS Cole (17 killed, 35 injured).
October 20, 2008: A parcel bomb detonated in Sanaa city, San'a province of Yemen, killing Shaykh Mohammad bin Rabeesh Kaalan, security chief for Madghal district.
February 15, 2012
On October 12th, 2000 al-Qaeda in Yemen (AQY) emerged as a group hostile to American involvement in Yemen with the bombing of the USS Cole in the Aden harbor. Originally under the leadership of Abu Ali al-Harithi, AQY was the Yemeni branch of the al-Qaeda franchise, although they were never recognized by al-Qaeda leadership publicly. After the initial attack on the USS Cole the United States responded with a drone strike that killed Harithi and five companions while they drove into the lawless tribal areas of Yemen. Originally attributed to the Yemeni government, the strike was later acknowledged by Washington as a CIA operation.
Following the death of al-Harithi Muhammad Hamdi Sadiq al-Ahdal took over as the leader only to be arrested at his wedding in late 2003. After the arrest of al-Ahdal AQY seemed to fall apart. There was no apparent succession, no person publicly stepped forward as its leader and many of its members were imprisoned. Many observers assumed that the group had been crushed and were ready to use the government's response to AQY as an example of how to conduct counter-insurgency operations.
In February 2006 AQY returned to public light when 23 of its members tunneled out of a Yemeni prison. This group included many high-ranking members of AQY, most notably Nasar al-Wahayshi, the soon-to-be leader of AQY. Between 2003 and the prison break in 2006 very little is known about AQY. Most of AQY's leaders were imprisoned and it is therefore assumed that, although there was at least one major attack, day-to-day operations of AQY were limited.
Under the new leadership of al-Wahayshi AQY began publishing a online newspaper entitled Sada al-Malahim ("Echoes of Epic Battles") in January 2008. The newspaper, published in Arabic, served as both a mouthpiece for AQY and a recruiting tool. Then, in September 2008 AQY undertook one of its largest operations, attacking the American Embassy in Sanaa, in which twelve people were killed and while this was one of AQY's biggest operations, it was still much smaller than attacks such as the Cole Bombing. This was in line with the reorientation of AQY under the leadership of al-Wahayshi toward a more continuous armed rebellion. In the years leading up to AQY's merger to form al-Qaeda in the Arabian Peninsula (AQAP) AQY began smaller-scale operations intended to weaken the Yemeni state.
In January 2009 AQY merged with its Saudi Arabian counterpart AQAP and continued under that name. AQAP members had for many months been escaping over the border into Yemen as the Saudi government tightened its grip on the group.
AQY's original leader, Abu Ali al-Harithi, was killed in a widely publicized CIA Predator drone missile strike in Yemen during the first stages of the War on Terror. He and four other associates were struck while driving about 200 km east of the capital Sanaa in late 2002. Subsequently Muhammad Hamdi al-Ahdal came to lead AQY. Al-Ahdal had many years of experience, fighting in Bosnia, Chechnya, and received training in Afghanistan. He was also described as the chief of financing of AQY from 2000 to 2003. The Yemeni government, however, was able to capture al-Ahdal. He was tried and convicted of forming an armed gang and collecting funds for al-Qaeda, but was released on time served after being in government custody for over three years. Al-Ahdal is currently subject to UN sanctions on travel and finances.
From late 2003 through 2007 little is known about AQY's leadership, if there was any. Nasar al-Wahayshi came to lead AQY after breaking out of prison with 25 others in early 2006. A former personal secretary of Osama bin Laden and veteran of the fighting in Tora Bora, al-Wahayshi took over as the leader of AQY in 2007 and continued as such until AQY's merger in 2009.
Qa'id Salim Talib Sinyan al-Harithi, also known as Abu Ali al-Harithi or simply Qa'id al-Harithi (2000 to November 5, 2002): Killed in CIA drone missile strike.
Muhammad Hamdi Sadiq al-Ahdal, alias "Abu-Asim" (2002 to November 25, 2003): Arrested by Yemeni government.
AQY is a Sunni Islamist terrorist organization. Throughout their literature and statements AQY states that they want to expel "infidels, Crusaders and Zionists" from the Holy Land. The more immediate goal of AQY was to destabilize Yemen in order to secure a safe-haven for al-Qaeda militants. The majority of their attacks focused on Yemeni or Western political targets within Yemen, illustrating AQY's desire to destabilize the political structure in Yemen.
Unlike the Iraqi and central branches of al-Qaeda, AQY was by and large an organization made up of Yemenis and their stated goal was to expel "polytheists" from Yemen, not necessarily international terrorism.  There is also no tangible proof that AQY received funding, tactical support, or even advice from other branches of al-Qaeda. Some in intelligence circles have argued that rise of AQY can be attributed to fighters leaving Afghanistan to take refuge in Yemen. 
Due to minimal control over the country by the Yemeni government, brought about by decades of civil strife, particularly the Houthi rebellion in the north, AQY had numerous areas within Yemen from which to operate. Specifically the states of Sa'dah, al-Jawf and Ma'rib, close to the capital but within the area of Houthi influence, were AQY safe havens. By the time of the merger with AQAP the lawless eastern province of Hadramawat was also used by AQY.
Targets & Tactics
Most often AQY targeted foreigners within Yemen as well as foreign interests in the country. This included tourist groups, western oil instillations, and western embassies and staff. AQY did, as they got closer to their merger with AQAP, begin targeting the Yemeni police and military. AQY also began focusing on smaller, continuous attacks as they moved into the 2008-9 time period, which differed from early on when AQY preferred larger one-time targets. They hoped, some argue, to demoralize and destabilize the Saleh regime to the point where it would collapse. The usual method of attack was either armed attack by al-Qaeda operatives or bombing, both suicide and conventional.
AQY does not maintain a political wing and strictly opposes the Yemeni Government.
October 12, 2000: the USS Cole, a U.S. destroyer, was attacked by a boat filled with explosives while docked in Aden, Yemen (17 killed, 35 injured).
October 31, 2005: gunmen ambush and kill policemen in Sa'dah City, Yemen (12 killed).
July 3, 2007: suicide car bomb driven into tourist convoy in Marib (9 killed).
May 30, 2008: militants fired two rockets at oil pipelines and refineries (0 killed).
September 17, 2008: militants disguised as security forces attack U.S. Embassy in Sanaa (16 killed, 6 injured).
Relationships with Other Groups
AQY, due to its fragmented power structure, worked closely with other like-minded terrorist organizations operating in Yemen. AQY especially worked with another prominent group called the Aden-Abyan Islamic Army. An organization made famous by Abu Hamza al-Masri, the British cleric who campaigned on their behalf. The Aden-Abyan Islamic Army was called an al-Qaeda affiliate by experts though there is evidence that they worked with other elements of al-Qaeda before the foundation of AQY. The Aden-Abyan Islamic Army was an ally of AQY.
AQY has close relationships with many of tribes that exist in the rural areas of Yemen. The relationships between AQY and Yemeni tribesmen were most often based on monetary compensation on the part of AQY, not necessarily ideological similarities, although certain elements within the tribal system were sympathetic to AQY's goals. Schanzer notes that the same Yemeni tribes took money from Marxists, Iraqis, and Saudis in the past, despite ideological differences. AQY also began marrying into tribes, a common tactic used by foreign organizations, as a means of solidifying their presence in the country.
AQY found little support in the northern Houthi regions. The Houthis are Zaidis, a small Shi'a sect. While AQY and the Houthis have similar goals with respect to the Saleh regime, mutual distrust and ideological opposition to each other prevented the two groups from working together.
Other Key Characteristics & Events
It is important to note that AQY's presence in Yemen, and its support by certain elements of Yemeni society, is made possible in part by social conditions within Yemen. Widespread political corruption, abject poverty, low rates of literacy and rampant chewing of qat, a mild narcotic drug to which the vast majority of the male population is addicted, are only a few of the most visible social problems that aided AQY's cause and continue to destabilize the country.
^ Vick, Karl. "Yemen Pursuing Terror in Its Own Way; Tactics, Results Vary, but the Target is al-Qaeda." Washington Post. 17 October 2002. A14.
^ Schanzer, Jonathan. "Yemen's War on Terror." Orbis. Vol. 48, Summer, 525.
^ Schanzer, Jonathan. "Yemen's War on Terror." Orbis. Vol. 48, Summer, 522.
^ Schanzer, Jonathan. "Yemen's War on Terror." Orbis. Vol. 48, Summer, 522.
^ United States. Cong. Senate. Committee on Foreign Relations Report. Al-Qaeda in Yemen and Somalia: A Ticking Time Bomb. 111th Cong. 2nd Ses. Washington: GPO, 2010.
^ Al-Faqi, Abdullah. Quoted in Nicholas Blanford. "Are Iran and Al Qaeda Vying for Influence in Yemen?" The Christian Science Monitor. 13 July 2004. Pg 11. World.Also see Haykel, Bernard. "Inside Story: Yemen's 'War on Terror.'" Al-Jazeera. 27 Dec. 2009. Television. Retrieved on 14 Dec. 2010 from http://www.youtube.com/watch?v=KI8MtOKYb1Y