<<Why would Al awlaki citizenship protect him any more than bin ladens?>>
He's a member of the tribe, not a citizen of it. It's a big tribe and its members are everywhere. I'm no expert on internal Yemeni politics, but the way I'd figure it is it's a combination of honour and self-preservation.
The Awlaki tribe probably understands that the CIA operates to some degree independently of the Yemeni government, and might be able to kill al-Awlaki on their own without any help or cooperation from the local government. If that happens, what can ya do about it? They don't have the illusion that the Yemeni government is strong enough to stop the U.S. government from slaughtering its own citizens on Yemeni soil. I mean, hell, if the U.S. Constitution doesn't stop the murdering bastards, how the hell can an impoverished Third World government like Yemen's stop them?
OTOH, they also know that the task of the U.S. government can be made a lot easier WITH the cooperation of the local government. In fact, local cooperation could make all the difference between Mission Impossible and Mission Accomplished. If the Awlaki tribe has reason to believe that the local government is cooperating with American murder squads in an attempted hit on one of the Awlaki, then not only is the government's honour severely tarnished in the eyes of the Awlaki, one of the biggest tribes in the country, but probably some lives are now on the line. I don't know how it works in Yemen but in other Arab societies, tribal influence can be pervasive and across-the-board, or it can be concentrated in specific areas, such as the military or commercial Depending on where the Awlaki influence is strongest, there is where the biggest threat of payback lurks.
People are free to ignore tribal affiliation and make their way without allegiance to any tribe, but many people see the advantages that their tribe can bring them and are prepared to shell out substantial lifetime financial contributions to their tribe and its leaders in return for the perceived protection and assistance the tribe can provide. If an Awlaki is murdered by the U.S. with active Yemeni government assistance to the murderers, and the murder goes unavenged, the value of the Awlaki "brand" goes down considerably, which in turn has severely negative effects on the power, influence and financial well-being of the tribe as a whole and its leaders in particular. This is not likely to sit well with the leadership of the tribe, and particularly if they have a strong presence in the military or the police, some very bad things can happen to any government official who is perceived to have been useful to the American assassins.
It looks to me like the Yemeni government has assessed the risks of assisting the U.S. in the murder of a U.S. citizen and decided that at least in this case, the potential rewards will not justify the potential risks.
<<or is the contract on bin laden illegal also?>>
As you can see, despite the huge sums placed on bin Laden's head, nobody seems anxious to step forward and try to collect. In OBL's case, I think his "tribe" is the entire Arab world, minus a handful of collaborationist puppet "leaders" maintained in power over their own people by U.S. dollars.
