DUBAI (Reuters) - Yemen's dominant Houthi group and its allies in ex-president Ali Abdullah Saleh's party said on Thursday they would establish a governing council to run the country, in a move the United Nations said threatens peace talks in Kuwait.

Senior officials in President Abd-Rabbu Mansour Hadi's government said the move undermined diplomatic efforts to end a devastating civil war that has drawn in a Saudi-led Arab coalition and caused a humanitarian crisis.

The announcement by the Iranian-allied Houthis and Saleh's General Peoples' Congress Party (GPC) could unravel an already shaky ceasefire that took effect in April and had reduced the intensity of the conflict.

"The Houthi and Saleh declaration today is a message to the world that they are not ready for peace and are not ready to spare Yemen more destruction," Hadi's deputy prime minister, Abdel-Aziz al-Jubari, told Dubai-based al-Hadath TV.

The head of the Houthi delegation to the talks said in a Twitter message that the announced deal was open to all sides. "The parties that support aggression have an opportunity to review their position and join this national agreement actively," Mohammed Abdul-Salam said.

But the U.N. Yemen envoy, Ismail Ould Cheikh Ahmed, said the move gravely violated U.N. Security Council Resolution 2216, which calls on the Houthis "to refrain from further unilateral actions that could undermine the political transition in Yemen".

"This development contravenes the commitments provided by (the Houthis) and GPC to support the U.N.-led peace process. The announcement of unilateral governing arrangements is not in line with the peace process and endangers the substantial progress made during the Kuwait talks," Ould Cheikh Ahmed said in a statement received by Reuters.

The talks under way in Kuwait had made little progress on U.N. peace proposals including a Houthi withdrawal from cities including the capital Sanaa captured since 2014 and the creation of an inclusive, more democratic government.


A statement carried by the Houthi-run news agency said the new council would entail a rotating leadership including a president and a deputy from each ally.

It said the deal was signed by GPC deputy head Sadeq Abu Ras and the Houthis' Ansarullah political council chief, Saleh al-Samad, and outlined a basis for running the country and managing state affairs on the basis of the existing constitution.

Houthi forces and Saleh loyalists now hold most of Yemen's northern half while Hadi's forces share control of the rest with southern separatists and various tribes, with al Qaeda-affiliated militants operating in parts of the country.

The accord as quoted by the cited what it called the international community's failure to rein in the "arrogance of the Saudi aggression" as an important factor in the decision to ditch the peace talks.

Saudi Arabia has said it intervened in the war to try to restore Hadi to power after Houthi forces began advancing on his temporary base in the southern port city of Aden last year, and to roll back Houthi gains. The Houthis say Saudi-led air strikes have devastated Yemen and blame them for most civilian deaths.

The war has killed more than 6,400 people, nearly half of them civilians, and displaced more than 2.5 million.

The Houthis had been overseeing regions they controlled via a so-called Revolutionary Committee with GPC participation.

It would now be replaced by a "High Political Council" comprising 10 members equally divided between the Houthis and GPC to "manage the country's affairs" in all political, military, economic and administrative spheres. Its presidency and vice-presidency would be rotated between the two allies.

(Reporting by Mohammed Ghobari and Ahmed Tolba in Cairo; writing by Sami Aboudi; editing by Mark Heinrich)