* Yemen says Iranian arms included Katyusha, Strella missiles
* Say arms destined for Shi'ite Muslim Houthi rebels
* Shipment is likely to further strain Iranian-Yemeni ties
Yemen's president has asked his Iranian counterpart to stop backing armed groups on its soil after coastguards seized a consignment of missiles and rockets believed sent by the Islamic Republic, a government official said on Thursday.
Iran has denied any connection to the weapons, found aboard a vessel off the coast on Jan. 23 in an operation coordinated with the U.S. Navy.
But government official Abdel-Rashid Abdel Hafez said President Abd-Rabbu Mansour Hadi had contacted Iran's President Mahmoud Ahmadinejad, to demand Tehran stop smuggling in weapons. Hafez gave no further details of the message.
"This is the most dangerous arms shipment being smuggled to Yemen," Yemeni Deputy Interior Minister Abdel-Rahman Hanash told Reuters. "It contained anti-aircraft missiles, C4 high explosives materials which only a few countries in the Middle East possess."
Yemen, a majority Sunni Muslim country, said last week the vessel had been loaded in Iran.
Yemen has complained to the U.N. Security Council and asked for the weapons shipment to be investigated by the council's group of experts that monitors compliance with the Iran sanctions regime. It includes a ban on arms exports, U.N. special envoy to Yemen, Jamal Benomar, said on Thursday.
The council has imposed four rounds of sanctions on Iran for refusing to halt its nuclear enrichment program, which the United States, European Union and their allies suspect is at the heart of a weapons program. Iran rejects the allegation and refuses to halt what it says is a peaceful energy program.
"The shipment contains weapons and some of the weapons are sophisticated weapons, surface to air missiles, for example. The government made a request to the sanctions committee for a full investigation," Benomar told reporters.
"They (the sanctions committee) will establish the facts on what happened, where the shipment came from, who were the recipients, et cetera," he said.
The 15-member council is also discussing whether to issue a U.S.-drafted statement on the weapons shipment.
Officials in Washington have said the shipment was believed to have been from Shi'ite Muslim Iran and destined for insurgents, likely to be Shi'ite Houthis mainly based in northern Yemen.
Yemeni state television on Wednesday showed Interior Minister Abdul Qader Qahtan and National Security Board head Ali al-Ahmadi inspecting the weapons including 122 mm Katyusha rockets, anti-aircraft Strella 1 and 2 missiles, RPG launchers, explosives materials and Iranian-made night vision goggles.
Hanash said that while the investigation into the shipment was still under way, it was certain that the weapons were destined for an insurgent group. He did not name the group.
A source at Hadi's office said the arms were destined for Houthi rebels.
The discovery of the shipment will likely further sour ties between Tehran and Sanaa, already strained over charges that Iran was working with separatists in the south and Houthi rebels in the north to further destabilise Yemen as it tries to rebuild after two years of political upheaval.
Yemen said in July it had rounded up a spy ring led by a former commander in Iran's Revolutionary Guard, according to the state news agency Saba.
Washington also believes Iran was working with Yemeni insurgents to expand its influence at the expense of Yemen's Gulf Arab neighbours, according to comments by the U.S. envoy to Sanaa published in the pan-Arab al-Hayat newspaper last year.
Iran has denied interfering in Yemen, a U.S. ally in its fight against al Qaeda militants.
The Houthi movement, named after the tribe of its leader, says it represents the claims of Zaydi Shi'ite Muslims who ruled Yemen for more than 1,000 years. Most Iranians follow a different Shi'ite sect but Yemeni officials say Houthis have travelled to Iran's seminary city of Qom for indoctrination.
Houthis have survived repeated government attempts to crush them. They fought a brief war with Saudi Arabia in 2009 after their conflict with Yemeni forces spilled across the border.