In one of the many proxy conflicts of the Cold War, a South Yemeni insurgency (with the support and backing of the Soviet Union) led by two nationalist parties revolted, causing the United Kingdom to unify the area and in 1967 to withdraw from its former colony.

It enjoyed modest oil revenues and remittances from its citizens working in the oil-rich Arab states of the Persian Gulf.

The only avowedly communist nation in the Middle East, South Yemen received significant foreign aid and other assistance from the Soviets.

Fighting was short-lived, and the conflict led to the 28 October 1972 Cairo Agreement, which set forth a plan to unify the two countries.

[5][6] Fighting broke out again in February and March 1979, with South Yemen allegedly supplying aid to rebels in the north by the National Democratic Front and crossing the border.

[11] In May 1988, the two governments came to an understanding that considerably reduced tensions, including agreements to renew discussions concerning unification, to establish a joint oil exploration area along their undefined border, now called the Joint Investment Area, by the Hunt Oil Company and Exxon.

[13] In November 1989, Ali Abdullah Saleh of North Yemen and Ali Salem al Beidh of South Yemen jointly accepted a draft unity constitution originally drawn up in 1981, which included a demilitarized border and border passage by Yemenis on the sole basis of a national identification card and a capital city in Sanaa.

The YSP, though it had won the most seats in voting in the less populated south, was considered a minor part of the new coalition government.

Remittances from these workers, an important part of the economy, were slashed and many Yemenis were placed in refugee camps while the government decided where to house them and how to re-integrate them into the workforce.

Continuous negotiations between northern and southern leaders resulted in the signing of the document of pledge and accord in Amman, Jordan on 20 February 1994.

Southern leaders seceded and established the Democratic Republic of Yemen (DRY) on 21 May 1994, but the new state was not recognized by the international community.

Ali Nasir Muhammad, the exiled South Yemen leader, assisted military operations against the secessionists.