Smoke rises from the U.S. Embassy in San'a, Yemen, on Wednesday after a car bomb hit the front gate of the compound. ((SABA/ Associated Press))

An attack on the U.S. Embassy in Yemen that left 16 people dead is a reminder America is still at war with extremists, U.S. President George W. Bush said Wednesday.

He made his comments in Washington, just hours after attackers armed with automatic weapons, grenades and at least one suicide car bomb assaulted the embassy in the capital city, San'a.

It was the fourth time in recent years that the compound has come under attack in Yemen, a country that has struggled to quash al-Qaeda extremists. Yemen is said to be the ancestral homeland of al-Qaeda leader Osama bin Laden.

"This attack is a reminder that we are at war with extremists who will murder innocent people to achieve their ideological objectives," Bush said.

"One objective of these extremists is to kill, to try to cause the United States to lose our nerve and to withdraw from regions of the world," Bush said.

'We want people to lead normal lives'

The embassy last came under attack just six months ago, when three mortar rounds aimed at the embassy hit a high school for girls next door. A Yemeni security guard was killed and more than 10 girls were injured.

Bush said the U.S. won't give in to the extremists.

"Our message is that we want to help governments survive the extremists," Bush said.

"We want people to lead normal lives. We want mothers to be able to raise their sons and daughters in a peaceful environment so they can realize the hopes and dreams of a better world."

One of the deadliest attacks on Americans abroad came in 2000, when 17 U.S. sailors were killed when suicide bombers with alleged links to al-Qaeda blew themselves up on an inflatable raft next to the USS Cole in the Yemeni port of Aden.

Failed attempt to breach compound walls

American officials said Wednesday morning's attack, which appears to be the work of al-Qaeda, was a failed attempt to breach the embassy compound's walls.

State Department spokesman Sean McCormack told reporters Wednesday that the embassy's security upgrades, combined with the response of security officials, stopped the attackers.

He said one embassy guard from Yemen was killed, along with several Yemeni security officials. Six attackers were also among those killed, officials said.

More than one explosion occurred during the attack, and gunfire erupted for about 10 minutes outside the compound. The explosions damaged several homes in the area, said a Yemeni security official, who spoke on condition of anonymity.

The Associated Press reported that police quickly cordoned off the area and ambulances rushed to the scene.

Regional TV news networks Al-Jazeera and Al-Arabiya reported that one of the embassy's buildings was on fire, but U.S. Embassy spokesman Ryan Gliha denied that a fire broke out.