* Yemen coping with security, development challenges
* Yemen's FM says his country waiting for pledged aid
By Missy Ryan
UNITED NATIONS, Sept 24 (Reuters) - Donor nations voiced support for Yemen on Friday as the poor country struggles to contain a rising al Qaeda threat and tackle other challenges that have made it a top world security concern.
British Foreign Secretary William Hague chaired the meeting of senior officials from Europe, China, Russia, and Gulf states, including European Union foreign policy boss Catherine Ashton and U.S. Undersecretary of State William Burns.
"No friend of Yemen can stand by when the economy of that state comes close to collapse ... Or when the authority of the government is challenged by extremism, by violence, by crime or by corruption," Hague told the meeting, held on the sidelines of the U.N. General Assembly.
"We are committed to protection of the people of Yemen," he said.
After a Yemen-based arm of al Qaeda claimed responsibility for the botched bombing of a U.S.-bound airliner late last year, fears have grown that Yemen could unravel into a failed state allowing extremist groups to thrive and launch attacks.
Officials expressed worry about mounting radicalism in Yemen, whose massive population of jobless youths are seen as a ready target for extremists, who are staging increasingly bold attacks on international and domestic targets.
"Yemen's security and stability and progress matters not just to Yemenis ... making sure this is not a country al Qaeda can infiltrate with impunity," British junior foreign minister Alistair Burt said after the meeting.
"The world has a vested interest in making sure Yemen is a success," he said.
The government in Sana'a faces a host of conflicts, including an intermittent six-year conflict with Shi'ite rebels in the north and mounting unrest by southern separatists.
The government of President Ali Abdullah Saleh is working to cement a shaky truce it made this year with northern Shi'ite rebels to end a war that has raged on and off since 2004.
PRAISE FOR REFORMS
But security is only one of a number of entrenched problems in Yemen, where only about 60 percent of adults are literate and water scarcity poses an existential threat.
People who attended a closed portion of the meeting said foreign officials praised Yemen for implementing some economic and political reforms, but said much more was required.
A 2006 donor conference resulted in pledges of about $5.7 billion for Yemen, but only a modest share of those funds have been disbursed, officials said.
Yemeni Foreign Minister Abubakr al-Qirbi told the meeting that his country could not afford to wait for pledged economic aid or spend more time simply discussing international support for Yemen.
"We have to move from the phase of goodwill to the phase of good work," he told the room packed with foreign officials.
"It's not a matter of writing prescriptions for your patient, you have to get the medicine otherwise his case will get only worse," Qirbi told Reuters after the conference.
"That medicine is more assistance for development and providing services, for improving standard of living of the Yemeni people -- for delivering on promises," he said.
Yet donors note that a big part of the delay has been due to Yemen's inability to effectively channel such vast sums into immature state institutions and concerns about corruption.
Yemen, whose oil reserves the International Monetary Fund says will run out within a decade, has introduced some fuel subsidy reforms as it struggles to tame high fiscal deficits, and it is working to reform its tax system.
Donors will hold another meeting of the "Friends of Yemen" group, and another conference on economic aid, in Riyadh early next year. (Editing by Eric Beech)
