* Presidential decrees curb powers of former leader
* Air strike, attack kill four al Qaeda militants in south (Adds air strike in Hadramout)
By Mohammed Ghobari
SANAA, Aug 7 (Reuters) - Yemen's president ordered the restructuring of some military units on Monday, aiming to curb the powers of a son of former leader Ali Abdullah Saleh and stabilise a country where Saleh's legacy still looms large.
State-owned news agency Saba said late on Monday that President Abd-Rabbu Mansour Hadi issued decrees transferring the command of some Republican Guards units to a newly formed force called the Presidential Protective Forces under his authority.
Other units from the elite Republican Guards, which is led by Brigadier General Ahmed Ali Abdullah Saleh, the ex-president's son, were placed under different regional command.
Lawlessness in Yemen has alarmed neighbour and top world oil exporter Saudi Arabia and the United States, which increasingly view the impoverished Arab state as a front line in their war on al Qaeda and its affiliates.
The president's decrees also incorporated some army units led by dissident General Ali Mohsen al-Ahmar, who broke away from Saleh's forces after the protests began last year, into the new presidential force or put them under regional command.
Ahmar welcomed the decrees and called them "brave and patriotic decisions", Saba said, adding that the moves restore unity to the armed forces and improve discipline.
Hadi, who had been Saleh's deputy, took power in February after standing as the only candidate in a presidential election, in a deal brokered by Yemen's Gulf neighbours to end the political upheaval. Restructuring the armed forces was a major element of the deal.
Hadi has promised to unify the army, which is divided between Saleh's allies and foes. In April, he removed about 20 top commanders, including a half brother of Saleh and other relatives.
The United States and Saudi Arabia both backed the power transition deal, concerned by the expansion of al-Qaeda's regional wing in a country next to major oil shipping lanes.
ISLAMISTS LYING LOW
Washington, which has used drones and missiles to kill alleged al Qaeda targets in Yemen, backed a military offensive in May to recapture swathes of land seized by insurgents in southern Abyan province last year.
The campaign was hailed as a major victory, though residents and analysts say Islamist fighters pushed out in June are simply lying low and waiting for a chance to regroup.
In the latest fighting, security forces killed five foreign militants and a local fighter in southern al-Baydah province overnight, a Yemeni security source said.
Their target was Abdullah Awad al-Masri, also known as Abu Osama al-Maribi, who ran an explosives factory and was viewed as the most dangerous al Qaeda commander in the province, the source said.
The Defence Ministry said security forces also killed two Islamist militants and arrested three during a sweep of Jaar, where a suicide bomber killed at least 45 people in an attack on a wake on Saturday.
An air strike killed two suspected militants in a vehicle in the eastern province of Hadramout, a local official said.
(Aditional reporting by Mohammed Mukhashaf,; Writing by Rania El Gamal, editing by Tim Pearce)