In apparent response to the Houthi show of force, ambassadors from the G18 group of nations that has backed UN peace talks to end Yemen's civil war issued a statement condemning "unconstitutional and unilateral actions in Sanaa."
"The Group of Ambassadors repeats its concern that actions taken by elements of the General People's Congress and the Houthis as well as their supporters are making the search for a peaceful solution more difficult," the envoys added in a statement posted on the US embassy's Facebook page.
As Houthi demonstrators packed Sanaa's Sabeen Square waving Yemeni flags and chanting slogans, chairman Saleh al-Samad outlined the council's plans for running the war-ravaged country following the breakdown of the peace talks earlier this month.
"Economic affairs will be the priority of our work in the coming period," he said.
In another speech broadcast on Houthi-run television, Samad ordered the Houthi delegation at peace negotiations in Muscat not to speak with the U.N. envoy leading the talks, saying they should first return to Sanaa for consultations with the council.
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"The hand of peace is still outstretched," he added.
Saudi-led air strikes intensify
Saturday's declaration formalised a vow earlier this month by the Houthis and their allies in the General People's Congress, the party of former President Ali Abdullah Saleh, to establish a body to govern the capital and other parts of the country under their control.
The demonstration -- one of the biggest in Yemen since the civil war broke out last year -- took place as the Saudi-led coalition backing exiled President Abd-Rabbou Mansour Hadi stepped up air strikes and fighting on the ground intensified.
As the rally was underway, three air strikes targeted the presidential compound located 600 meters away from the square without causing casualties, residents told Reuters.
Further north, rockets launched over the border from Yemen killed one person and injured five others in the southern Saudi city of Najran, Saudi state television reported. Houthi-run Al-Masirah television said the rockets had targeted a Saudi air force base.
Fighting also escalated on Saturday for control of Yemen's central bank, as President Hadi made plans to relocate the institution outside Houthi-held Sanaa and appoint a new board of directors, sources in his government told Reuters.
The central bank's governor dismissed the reports of new board appointments as "groundless" in an emailed statement. A spokesman from Hadi's government could not immediately be reached for comment.
The central bank has been considered the last bastion of the impoverished country's financial system, paying salaries to state employees on both sides of the front lines and guaranteeing food imports as Yemen approaches famine.
