Mock missiles are mounted on a truck during an anti-Saudi demonstration by Houthi followers in Sanaa on Firday. Yemen's Houthi group has agreed to join United Nations-backed peace talks in Geneva planned for June 14.

* Scud missile shot down with two Saudi Patriot missiles

* First launch of ballistic missile in over two-month war

* Saudi-owned TV reports escalation of border clashes 

Reuters/Dubai/Sanaa

Saudi Arabia shot down a Scud missile fired into the kingdom by Yemen's dominant Houthi group and its army allies on Saturday, according to the Saudi state news agency, in a major escalation of two months of war.

In the first use of a Scud in the conflict, the missile was fired early Saturday morning at the city of Khamees al-Mushait in the kingdom's southwest and was intercepted by two Patriot missiles, a statement by the Saudi-led Arab military coalition said.

The area is home to the largest air force base in southern Saudi Arabia but there are no oil facilities in the vicinity.

An alliance of Gulf Arab nations has been bombing the Houthi militia and allied army units loyal to powerful ex-President Ali Abdullah Saleh since March 26 in an attempt to restore exiled President Abd-Rabbu Mansour Hadi to power.

The coalition has said a main goal of its war effort is to neutralise the threat that rockets in Yemen pose to Saudi Arabia and its neighbours.

The coalition states also fear the Houthis, hailing from a Shia sect in Yemen's far north, will act as a proxy for the influence of their arch-rival, Iran, in the Arabian peninsula.

Iran and the Houthis deny any military or economic links, and the Houthis say their seizure of the capital Sanaa in September and their advance southward is part of a revolution against a corrupt government.

Border battle

Arab air strikes have pounded arms and missile stores in the capital Sanaa and other military bases in Yemen almost every day, but the firing of the Scud - an 11-metre long ballistic missile with ranges of 300 km and more - shows the country's supply has not yet been eliminated.

Saleh, Yemen's autocrat president from 1978 to 2012, was forced to step down amid Arab Spring street protests but retains most of the army's loyalty and has joined forces with the Houthis in combat with Hadi's armed backers in Yemen's south.

Saudi-owned Al Arabiya TV described overnight ground fighting along the border as the "largest attack" yet by Houthi forces and Yemen's republican guard, a unit close to Saleh.

"It was the first confrontation undertaken by Saleh's (Republican) guard, and coalition planes and Saudi Apache (helicopters) undertook ground fire for 10 hours," said Al Arabiya's correspondent in the southern Jizan region.

Hamed al-Bukhaiti, a Houthi spokesman, indicated that the group had embarked on an escalation along the border.

"The options are open and the battle has begun to block the aggression on Yemen tonight ... this is the battle the people of Yemen have been awaiting," he said on his twitter page overnight.

Saudi-led forces said on Friday that four Saudi troops, including an officer, were killed after an attack was launched from the Yemeni side on border areas in Jizan and Najran.

The violence comes despite progress toward UN-backed peace talks planned for Geneva this month, to which both the exiled government and the Houthis have agreed.