Saudis Pledge $3.25 Billion in Aid to Yemen RIYADH (Reuters) - Saudi Arabia, concerned that chaos in Yemen is creating an al Qaeda base on its doorstep, pledged $3.25 billion in aid to its neighbour at a donor group meeting two days after more than 90 Yemeni soldiers were killed in a suicide attack. Riyadh, which already provides oil and military aid to its impoverished neighbour, convened Western and Arab Gulf nations to see how they can help Yemen push ahead with reforms and tackle its poverty and lawlessness. "I assert one more time our support to Yemen to back all the phases of the political initiative to help achieve security, stability and prosperity in facing the threats of extremism and terrorism," Saudi Foreign Minister Saud al-Faisal told envoys from Western and Arab Gulf nations gathered on Wednesday. He did not detail how the money would be used. Yemeni Finance Minister Sakhr Ahmed al-Wajeeh told reporters before the conference that Sanaa needed international aid if its economy was to grow in 2012. He said he would be happy with even a 1 percent rise in gross domestic product. Yemen is likely to run a $2.5 billion budget deficit this year, he added. The donor group was discussing political developments since President Ali Abdullah Saleh stepped down in February, ending his three-decade rule in the Arabian Peninsula state after nearly a year of mass protests. "We see key outcomes from this meeting focusing on types of concrete assistance the group can give to support the Yemeni government's plans for long-term reform," said a British Foreign Office spokesman. The group also aims to discuss immediate ways it can help address the worsening humanitarian situation. Yemen's government lost control over large swathes of the country during the past year as the political crisis caused splits in the military and tribes were angered by U.S. drone attacks on suspected militants. Western countries and Yemen's neighbours have watched with alarm as al Qaeda has established a strong presence in areas controlled by Islamist militias, allowing the group to plan attacks outside the country. Monday's assault on a military parade in Sanaa, which killed more than 90 soldiers, came only weeks after Washington said Western and Arab intelligence agencies had foiled an al Qaeda airline bomb plot hatched in Yemen. Wednesday's meeting was the group's first since Saleh resigned to allow the election of a new president, Abd-Rabbu Mansour Hadi, in February for a two-year transition period. Yemeni Prime Minister Mohammed Basindwa and Planning and International Cooperation Minister Mohammed al-Saadi were attending the Riyadh gathering of the "Friends of Yemen" co-chaired by Saudi Arabia and Britain. Countries from the Gulf Cooperation Council, which includes Saudi Arabia, Kuwait, Qatar, Bahrain, the United Arab Emirates and Oman, were also likely to attend, as were the United States, the European Union, France, Egypt and Russia. The gathering was held in a lavish Riyadh hotel where huge crystal chandeliers hang from faux-baroque ceilings and bronze equestrian statues tower above delegates on marble pedestals. In April the International Monetary Fund resumed lending to Yemen, approving the payment of a $93.7 million loan to help the country address a balance of payments deficit that worsened during the political turmoil. Saadi said in February that about $3 billion of aid that was pledged by the Friends of Yemen in 2006 had still not been delivered. Editing by Mark Heinrich