DUBAI (Reuters) - Yemen’s armed Houthi movement and its political allies formed a new government on Monday, the Houthi-run state news agency Saba reported, in what appeared a blow to U.N.-backed efforts to end 20 months of war in the country.

Diplomats had hoped the Houthis, who control the capital Sanaa, would hold off on putting together a cabinet of their loyalists and instead form a unity government with their Yemeni foes, whom they pushed into Saudi exile.

The Houthis, who control territory with more than half of Yemen’s population, previously said forming a government with their allies did not mean abandoning the U.N.-sponsored peace process.

The flight of Abd-Rabbu Mansour Hadi, the internationally recognized president, triggered military intervention by a coalition led Saudi Arabia that has carried out thousands of air strikes on the Houthis but failed to dislodge them from Sanaa.

Having caused the deaths of at least 10,000 people and unleashed a humanitarian crisis, the Arabian Peninsula conflict has continued despite several U.N.-backed ceasefires and peace efforts by Western and U.N. diplomats.

The Houthis this month agreed to a U.N. plan which required them to hand in heavy weapons and pull out of main cities in exchange for participating in a unity government with Hadi, who rejected the proposal, saying he was the legitimate president.

Making common cause with the party of powerful ex-president Ali Abdullah Saleh, the Iran-allied Houthis previously ruled the parts of Yemen they controlled through a “Supreme Political Council”, a body which announced the new government.

“The meeting stressed that the government, which was formed amid the difficult conditions experienced by the country, is tasked with putting in order the internal situation and confronting the (Saudi) aggression,” Saba reported.

“The Council noted that this comes amid the intransigence of the aggression and its (Yemeni) mercenaries to move within the framework of a national solution ... to spare the country further bloodshed and destruction.”

Rajeh Badi, a spokesman for the exiled Hadi government, said the move showed “a disregard not just for the Yemeni people but also for the international community.”

“Over a year and a half since the Houthi militia’s coup, no one in the international community has recognized the entities they have formed,” Badi added.

There was no immediate comment from the United Nations.</s>SANAA, Yemen — Yemen's Houthi rebels and allies from the ousted president's party have formed a new government, deepening divisions in the Arab world's poorest nation.

Houthis and their allies from ousted president Ali Abdullah Saleh's General People's Congress party announced late Monday the formation of the so-called National Salvation Government, the second in Yemen, based in the capital Sanaa.

Yemen has an internationally-recognized government based in the southern city of Aden.

The announcement came at a time that U.S.-backed, U.N.-mediated peace efforts have faltered.

The Houthis launched an offensive from their northern enclave in 2014 to take Sanaa and much of northern Yemen. The rebels forced President Abed Rabbo Mansour Hadi to flee the country and seek shelter in Saudi Arabia. A Saudi-led coalition, mostly consisting of Arab Gulf states, subsequently intervened in Yemen, launching a punishing air campaign against the Houthis.</s>The move, reported by the Houthi-run state news agency on Monday, has been seen as a blow to U.N.-backed efforts to end 20 months of war in Yemen.

"The announcement by (the Houthi) Ansar Allah and the General People’s Congress on the formation of a new government in Sana’a represents a new and concerning obstacle to the peace process and does not serve the interests of the people of Yemen in these difficult times," Ismail Ould Cheikh Ahmed said in a statement.

The unilateral declaration contradicted recent comments by the Houthis to the U.N. and to U.S. Secretary of State John Kerry, and only complicated the search for a peace deal, which needed to be based on U.N. talks, Ould Cheikh Ahmed said.

"There is still a chance to pull Yemen back from the brink," he said, adding that all parties to the conflict should recommit to a cessation of hostilities, including a complete halt to ground and air military activities.

The formation of the new government was also condemned by the Gulf Cooperation Council, whose member Saudi Arabia is leading a coalition backing Abd-Rabbu Mansour Hadi, the internationally recognised president.

The coalition has carried out thousands of air strikes on the Houthis but failed to dislodge them from the capital Sanaa.

"The step of forming a government indicates the enormous importance of reinforcing our domestic position and serving the people, despite the difficult economic situation," the Houthi group's leader, Abdul-Malik al-Houthi, said in a statement carried on the website of a Houthi-controlled news channel.

Diplomats had hoped the Houthis, who control Sanaa, would hold off on putting together a cabinet of their loyalists and instead form a unity government with their Yemeni foes, whom they pushed into Saudi exile.

The Houthis, who control territory with more than half of Yemen's population, previously said forming a government with their allies did not mean abandoning the U.N.-sponsored peace process.</s>The minority Shia group has been in control of Sanaa over the past two years, after driving out the internationally-recognized government and forcing its president, Abdu Rabbu Mansour Hadi, to flee to neighboring Saudi Arabia.

The so-called National Salvation Government, formed on Monday, will be headed by Abdul Aziz Habtoor, a politician who had defected from Hadi's government and joined the Houthi coalition last year, according to the movement's news agency Saba.

Houthi spokesperson Mohammed al Bukhaiti said that the new government, formed with a number of allied groups, "was meant to strengthen the partnership in the country."

"It includes parties from all the political spectrum," he told CNN over the phone from Sanaa, while adding that it excluded politicians supportive of Hadi's exiled government.

The move comes at a time when the United Nations is scrambling to negotiate a peace deal between the waring parties and set the groundwork for an inclusive unity government. Yemen: The 'forgotten war' cloaked in the shadow of Syria Al Bukhaiti told CNN the newly-declared government was "not an alternative to a future unity government that would include members of those who are pro-aggression". His reference was a swipe at the Saudi-led military coalition that has been backing Hadi and bombarding Houthi positions in Yemen since March 2015. Following the declaration of the government, Rajeh Badi, a spokesman for the Hadi government, was quoted by Reuters as saying that the move showed "a disregard not just for the Yemeni people but also for the international community." The UN envoy to Yemen, Ismail Ould Cheikh Ahmed, has yet to comment on the development. He met with a number of officials in Yemen's neighboring countries over the weekend to "prepare for a new round" of talks, he said in a statement on Sunday. The conflict in Yemen has killed an estimated 10,000 people and left millions in need of aid, according to the UN. The World Food Programme warned last month of the devastating toll that hunger could have on the war-torn country, adding that "an entire generation could be crippled by hunger". Since peace talks in Kuwait failed in August, the coalition has intensified air raids, despite vocal criticism from rights groups that the bombardments have been indiscriminate and could constitute war crimes. The attacks have often hit civilian targets with devastating results. In October, the Saudi-led coalition admitted that it was responsible for an airstrike that killed at least 155 people at a wake in Yemen that month. The US has come under increasing pressure to stop selling arms to Saudi Arabia . The US Senate last month rejected a bipartisan proposal to block a pending $1.15 billion arms sale to Riyadh.</s>Pro-Houthi tribesmen shout slogans during a gathering held to mobilise fighters for battles against government forces in Sanaa, Yemen, on November 24 (Reuters photo)

MUSCAT — The UN envoy for Yemen has announced a new bid for peace talks between the government and rebels, after the latest ceasefire failed to end the 20-month conflict.

The peace efforts by Ismail Ould Cheikh Ahmed came as dozens were reported killed in fighting at the weekend.

Envoy Ould Cheikh Ahmed said he was heading to Riyadh and Kuwait "to prepare for a new round" of talks, as he left Muscat late Saturday after discussions with representatives of Yemen's Shiite Houthi rebels and their allies.

Riyadh has been the base of Yemeni President Abed Rabbo Mansour Hadi since the rebels forced him to flee his country in March 2015, and prompted Saudi Arabia to lead an Arab coalition in a military campaign against the insurgents.

The UN envoy was to meet Hadi "within two days" in the southern Yemeni city of Aden to receive the government's response to his peace proposals, Foreign Minister Abdel Malek Al Mekhlafi told AFP.

Hadi flew to Aden on Saturday for a surprise visit to the port city, which is serving as Yemen's temporary capital since coalition-backed loyalists recaptured it from the rebels.

Ould Cheikh Ahmed, quoted by Oman's official ONA news agency, said he found "a lot of seriousness" in talks with representatives of the Houthis and their allies from the party of former president Ali Abdullah Saleh.

The envoy also said he had been in contact with US Secretary of State John Kerry who "sees a historic chance to achieve peace in Yemen".

A previous round of peace talks held in Kuwait collapsed in August.

A 48-hour ceasefire declared by the coalition ended last Monday with little success in reducing violence in the war-torn country.

Both parties traded blame for the numerous violations of the ceasefire that came into effect after Kerry intervened.

It was the latest international attempt to end a conflict which the United Nations says has killed more than 7,000 people and wounded nearly 37,000 since March last year.

The Houthis overran the capital Sanaa and other parts of the impoverished country in September 2014.

A Yemeni official said Sunday 12 civilians were killed when a coalition air strike hit two makeshift wooden houses sheltering displaced families in the western province of Hodeida.

The official said the raid late on Saturday had apparently targeted the two houses "mistakenly", adding that a rebel position 300 metres away was untouched.

The coalition has been strongly criticised over the high number of civilians killed in its air strikes.

In northwest Yemen, the sources said, 40 soldiers and 22 rebels have been killed since Friday in heavy clashes for control of a road linking the Red Sea port city of Midi and nearby Haradh.

Elsewhere, two women were killed in rebel bombing of the southwestern city of Taez, military officials said.

Clashes raged on the outskirts of the flashpoint city, killing four rebels and three government soldiers late on Saturday, they said.</s>His comments, likely to be of concern to Shi'ite Iran's Sunni regional rival Saudi Arabia and its allies, raised the prospect of distant footholds perhaps being more valuable militarily to Tehran than nuclear technology.

"We need distant bases, and it may become possible one day to have bases on the shores of Yemen or Syria, or bases on islands or floating (bases)," said General Mohammad Hossein Baqeri, quoted by the Shargh daily newspaper.

"Is having distant bases less than nuclear technology? I say it is worth dozens of times more," added Baqeri, who was speaking at a gathering of naval commanders.

Iran and Saudi Arabia are on opposite sides in Middle East conflicts, with the Iranians a main ally of President Bashar al-Assad in Syria's civil war and of the armed Houthi movement fighting a Saudi-led military coalition in Yemen.

In a rare rebuke for Iran, a Houthi official on Sunday criticized Baqeri's comments and urged Tehran to read about the history of failed attempts to occupy Yemen.

"Not one inch of Yemen's land or waters will be forfeited to any foreign party ... whether a friend or an enemy," said Saleh al-Samad, the Houthis' political council chief in a statement on Facebook.</s>UNITED NATIONS (AP) — The U.N.’s special envoy for Yemen says an announcement by the Houthi rebels and allies from the ousted president’s party to unilaterally declare the formation of a new government in Sanaa is an obstacle to the peace process.

Former president Ali Abdullah Saleh’s General People’s Congress and Ansar Allah, the political arm of the Shiite rebels known as Houthis, announced the agreement Monday.

U.N. Special Envoy Ismail Ould Cheikh Ahmed said in a statement Tuesday that the announcement “does not serve the interests of the people of Yemen in these difficult times.” The announcement came at a time that U.S.-backed, U.N.-mediated peace efforts have faltered.

The Houthis have been fighting forces loyal to the internationally recognized government based in Aden. The pro-government forces are backed by a Saudi-led coalition.</s>Fighting continued in Yemen after a short lived ceasefire on the weekend was breached by Houthi rebels. The Saudi-led alliance also fired missiles during the ceasefire, but claimed they were in retaliation. The Saudis said the ceasefire will not be renewed.

John Kerry had announced that a peace proposal had been agreed to by both the Saudi-led coalition and the Houthi rebels a week before.

The Hadi government rejected the proposal, claiming that they had been bypassed and ignored by Kerry. The Arab coalition, led by Saudi Arabia, have previously been supporting the Hadi government with air strikes.

But this disagreement signals a possible future loss of support, as informed sources say that Kerry plans to ease Hadi out of power.

Both the Houthi rebels and the Saudi coalition had agreed to a ceasefire and to send representatives to a de-escalation and coordinating committee. But Yemeni foreign minister al-Mehkhlafi wrote on Twitter that the U.S. government were coordinating with the Houthis without any involvement from the Yemeni government.

Fighting resumed for a week after the proposal was rejected, until a ceasefire was proposed on the weekend, which lasted less than a day.

Time is running out for Kerry as he is on presumably his last trip to Yemen, before President-Elect Donald Trump’s inauguration in January.

The Houthis have publicly stated after the rejection of the peace proposals that they want to end the fighting in Yemen, and have claimed that the Saudis are ready as well, although this wasn’t confirmed in Riyadh.

The peace proposals weren’t publicly available, although informed sources claimed that the plan was to transfer power from Hadi to the Vice President, who would then appoint a new Prime Minister.

A unity government was to be formed by all parties, including the Houthis, and equal representation was to be given to the North and the South.

The proposals were an explicit departure from the previous UN Security Council resolution 2216, which required the Houthi rebels to withdraw from territory gained since 2014. The new proposals would let the Houthis retain control of some cities gained since the fighting began two years ago.

The Yemeni civil war, which started in March 2014, is a significant security issue for the U.S., as a branch of Al-Qaeda, AQAP, has a strongbase in the war-torn country.

President Abd Rabbuh Mansur Hadi fled to the port city Aden at the beginning of the war, but as Houthi rebels approached he fled to Riyadh, the Saudi capital, where he currently commands the government-in-exile. His government is supported financially and militarily by Saudi Arabia.

The Saudi-led coalition have been accused of intentionally bombing civilian targets, like schools, hopsitals and funerals.

Some critics claim that the UK Government has been complicit in these war crimes, by continuing to allow BAE Systems, a British weapons manufacturer, to supply arms to Riyadh.

The Houthi rebels, who are supported financially by Iran, are suspected of abducting a journalist last month. Yousef Ajlan was abducted in October, and has not been seen since.

A press briefing at the U.S. State Department heard that the peace proposals are still being pursued, although Kerry has not had any direct conversations with President Hadi since.
Yemen's Houthi movement and its allies form a new government.