SANAA, North Yemen -- South Yemen ended 23 years of Marxist rule Tuesday and united with its more prosperous neighbor North Yemen, forming the new Yemeni Arab Republic.
A ceremony marked the creation of the new state in the South Yemen capital of Aden and the legislative bodies of the two Gulf states elected Ali Abdullah Saleh of North Yemen as president in a joint session.
State-run Radio Sanaa said the new president hoisted the red, white and black flag of the new state and proclaimed the birth of a unified Yemen after a guard fired a 21-gun salute.
South Yemen, once a major trading center for spice and silk, gained independence from Britain in 1967 while North Yemen became independent in 1918 after years of Ottoman and Turkish rule. The combined country in the southwest corner of the Arabian peninsula will have a population of 11 million.
The unification was hailed by the United States, but there were lingering fears on both sides that rival Islamic and Marxist influences might cause future problems for the new state.
In Washington, State Department spokeswoman Margaret Tutwiler said the United States welcomed the announcement on unification and was studying the implications of the action, including whether to remove South Yemen from the State Department's list of states that support terrorism.
Tutwiler said it had not been decided whether the U.S. Embassy would be located in Aden or Sanaa, the capital of North Yemen.
South Yemen was the only Arab state to adopt a Marxist system of government, while North Yemen has been considered a conservative state where tribes still hold wide influence in the country's affairs.
But Soviet influence in South Yemen, one of the world's poorest countries, began to wane as pro-democracy changes in Eastern Europe made it increasingly clear the tiny country would either have to go it alone or unite with North Yemen.
Earlier this year, East Berlin stopped paying the wages of some 200 East German military and technical advisers stationed in South Yemen. When Aden refused to foot the bill, the East Germans and their families left the country.
Sanaa-based Western diplomats said Cuban advisers in Aden also have left, leaving just a handful of Soviets to help the struggling country.
Although both Yemens had declared their intention to unify as early as 20 years ago, the events in Eastern Europe sped the decision to a conclusion, diplomats said.
Neighboring Saudi Arabia also pressured the Yemens to unite, sources said.
Government officials in Aden, which has been declared the new Yemen's commercial capital because of its strategic port, have expressed fear that Islamic influences from the north may be forced on the secular people of the south.
Equally, officials in Sanaa fear that Marxist and secular ideas, including women's rights, might make inroads in the more conservative north.
Although Saleh declared Tuesday that the Islamic law would be the basis of legislation for the new Yemeni state, officials in Aden said the new country probably would be more along the lines of modernized Egypt rather than the extemely conservative Saudi Arabia.
The country will be ruled by a joint session of the 17-member Supreme Presidium of the former South Yemen and the 25-member consultative council of the former North Yemen.
The new state will decrease the number of Arab League members from 22 to 21; the number of countries in the United Nations 166 and in the world to 217.