Ismail Omar Guelleh said the war in Yemen, on the other side of a narrow sea channel from the Horn of African nation of Djibouti, was stoking dangerous rivalries between Shiite and Sunni Muslims, bolstering Al-Qaeda's franchise in the country and posing wider risks for the region.
Guelleh also warned the violence could allow the Yemen-based Al-Qaeda in the Arabian Peninsula (AQAP) franchise to expand its power and control.
AQAP "is taking advantage of these renewed tensions between Sunnis and Shiites... This may create a big gap between Yemeni people, who had never felt the difference between the two communities," Guelleh told AFP in an interview at the presidential palace in Djibouti.
Guelleh said the Saudi-led military action was necessary, but worried the war would split communities, with Shiites becoming a target for both Saudi airstrikes and Al-Qaeda's Sunni extremists.
The fighting in Yemen has already sent thousands fleeing across the sea to Djibouti, with many more expected.
"Our borders remain open, they have always been," said Guelleh, president since 1999 of the strategic former French colony, whose port guards the entrance to the Red Sea and Suez Canal.
