The dead were six Yemeni soldiers, four civilians, one of whom was Indian, and six attackers - one wearing an explosives belt, the country's interior ministry said.
Local sources told Sky News explosives had been hidden in a car disguised as an army vehicle which got as far as the compound's main gate before being detonated.
Several rocket-propelled grenades were fired and a gun battle broke out that is believed to have killed and wounded both guards and attackers.
"Our information is that because the attackers were in army dress in army vehicles they probably got waved through the first checkpoint," said Sky News foreign affairs editor Tim Marshall.
"It was a well-organised and well-planned attack."
A senior US official said there had been up to five explosions and that the Yemeni authorities who first responded were ambushed by snipers.
He said it appeared some of the attackers were dressed as Yemeni troops, and that the first emergency personnel to arrive on the scene were hit by heavy sniper fire from riflemen laying in wait across the street from the embassy.
Sky News can reveal that the US and British embassies in Sanaa had received a threat from the Yemen branch of the Islamic Jihad Organisation on September 14.
It demanded the release of wounded prisoners and threatened the use of suicide car bombers.
It demanded the release of wounded prisoners and threatened the use of suicide car bombers.
"We will strike against all foreign interests, especially American and British interests, accurately and quickly," it said.
After the attack, the group claimed responsibility and threatened to target the British, Saudi and Emirati missions in Sanaa.
The White House denounced the violence and offered condolences to the relatives of Yemeni victims.
"The United States condemns this attack," a spokesman said.
"This attack is a reminder of the continuing threat we face from violent extremists both at home and abroad."
"This attack is a reminder of the continuing threat we face from violent extremists both at home and abroad."
Yemen, the ancestral home of Osama bin Laden, has been hit by a series of al Qaeda attacks this year.
One targeted the embassy, another took place near the Italian mission and others were aimed at Western tourists.
The Yemeni government joined the US-led war against terrorism in the wake of 9/11.
The government of the poor Arab country has also been fighting Shi'ite rebels in the northern province of Saada since 2004 and faced protests against unemployment and inflation.
The government of the poor Arab country has also been fighting Shi'ite rebels in the northern province of Saada since 2004 and faced protests against unemployment and inflation.
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