Saudi Arabia welcomes deal between Huthis, Yemen govt

Saudi Arabia, a key player in Yemen's nearly decade-long war, on Wednesday welcomed a deal between Yemen's government and the Iran-backed Huthi rebels to halt tit-for-tat banking sanctions.

The deal was announced on Tuesday by Hans Grundberg, the United Nations' envoy to Yemen, in a bid to end the warring parties' battle for control over the country's financial institutions.

Saudi Arabia, which has spearheaded a coalition fighting the Huthi rebels since 2015, said it "welcomed" the agreement.

A Saudi foreign ministry statement expressed "support for efforts aimed at achieving peace and security for Yemen," and said it hopes the latest deal "will contribute to reaching a comprehensive political solution" to the conflict.

Grundberg had credited the kingdom with "significant efforts" to broker the deal, cautioning however that it did not guarantee progress to end the war in the Arabian Peninsula's poorest country.

The rebels and the government had in December committed to a UN-led roadmap to end the war, agreeing to work towards "the resumption of an inclusive political process".

But Huthi attacks on Red Sea shipping since November and subsequent US and British retaliation have put peace talks on hold.

Tuesday's announcement came as Yemen reeled from a deadly strike on the Huthi-held harbour of Hodeida, which Israel said it carried out in retaliation for the first fatal Huthi strike on Tel Aviv last week.

According to analysts, the agreement followed threats from the Yemeni rebels to attack Saudi Arabia.

"Threatened with new attacks, Saudi Arabia has forced the Yemeni government to abandon efforts to cut off the Huthi group... from the international banking system," said the Sanaa Centre for Strategic Studies think tank.