The Iranian espionage cells which were arrested in Yemen in the past few weeks comprised of Iranians, Syrians and Yemenis who operated in the capital Sanaa and the port city of Aden under the cover of businessmen and investors, the state-owned September 26 website reported on Monday.

"The Iranian and Syrian spies entered the country as investors. They got a license to build a factory in Aden but were arrested while transporting equipment for the project," the website quoted an official source as saying.

The spies were arrested after the authorities in Aden discovered, while inspecting the equipment at the Aden port, that the equipment brought for the civil project were for military purposes, the source was quoted as saying. "The spies planned to reassemble the equipment to produce missiles and other weapons with the aim to destabilize the country during the current crucial turning point".

President Abdrabu Mansour Hadi revealed the Yemeni authorities have recently uncovered several rings spying for Iran, six or seven, urging the Islamic republic of Iran to stop meddling in Yemen's affairs.

He accused Iran of arming and backing some groups including a southern faction and has refused to meet Iranian officials over the issue including President Mahmoud Ahmadinejad while Hadi was on a US visit. Iran has denied the accusations saying they were baseless and the bilateral ties have started to worsen.

The authorities have already started investigation of the spies after Iran exploited the latest developments to expand its operations in Yemen through attracting media and political opposition figures to undermine the political transition sponsored by the GCC and the West, the official continued.

Iran has been accused of supporting the Shiite Houthi Group in the far north which fought the Yemeni army six times under the former regime.

This group is heavily armed and has been in sporadic clashes with tribes and other foes, even after it joined the popular uprising in early 2011 and accepted to participate in the dialogue under the West-backed power-transfer deal.