WASHINGTON (Reuters) - Saudi Arabia's drive to disrupt al Qaeda financing networks should be more strictly enforced while Yemen is emerging as a new base for terror groups plotting against U.S. and Saudi interests, a U.S. government watchdog report said on Tuesday.

The Government Accounting Office (GAO) said Saudi Arabia has made progress in the fight against terrorism, arresting and prosecuting suspects and taking steps to curtail fund-raising by extremist groups inside the country.