Yemen is plagued by conflict along the strategic Bab al-Mandab Strait, one of the world's busiest shipping lanes. Since 2015, a civil war has erupted between the Houthis, the internationally recognized Yemeni government and its supporters, and other anti-government forces. This conflict has been complicated by foreign intervention, contributing to what UN agencies have described as one of the world's largest humanitarian crises." The conflict continued for ten consecutive years until a ceasefire was concluded in 2021. The year 2021 was marked by events that marked a new turning point in the war in Yemen, as the country moved from a military war to an economic war. Violence declined relatively from the signing of the truce between the two parties to the conflict (the Houthis and the government) in April 2021 until after its expiration in October 2022, accompanied by a decrease in the number of casualties. A new Supreme Executive Council of eight members was formed, to which the presidential authority and powers were transferred to the internationally recognized government, not to the local authority of the Houthis at least. Despite its members taking the constitutional oath, the council failed to heal internal rifts within the anti-Houthi coalition camp, defuse regional tensions, or address the economic deterioration that the country has witnessed in recent years.

Developments in the Saudi Ceasefire Initiative (Truce) 2021-2023

First Requirement: Political and Military Developments

Based on the results of the Yemeni National Dialogue, the Gulf Initiative, which was announced by the Gulf Cooperation Council in April 2011 to arrange a peaceful transfer of power, and UN Security Council Resolution 2216, which calls on the Houthis to immediately and unconditionally withdraw their forces, the initiative mandated that the Yemeni parties start negotiations to reach a political solution under the United Nations' auspices. In line with the 2019 Stockholm Agreement, it also demanded that the port of Hodeidah be opened, that Sana'a International Airport be opened to several direct regional and international destinations, and that taxes and customs revenues from ships carrying oil derivatives from the port be deposited into a joint account at the Central Bank of Yemen in Hodeidah [2].

The Houthis, however, rejected the plan because they claimed it was unoriginal and did not satisfy their demands for the siege to be lifted entirely. The Sultanate of Oman, the initiative's mediator, the United States of America, and the capital, Riyadh, will continue to be discussed, they affirmed. According to their spokesperson, Mohammed Abdul Salam, the Houthis rejected a similar initiative that had previously been carried out under UN supervision, which is largely in line with the stance taken by Saudi ambassador to Yemen Mohammed Al Jaber, who confirmed in a press conference [3]. In exchange, and to kickstart the initiative, former US President Joe Biden decided to intensify diplomatic efforts to end the war in Yemen and remove the Ansar Allah group (Houthis) from the list of foreign terrorist organizations (SDGT) (*), which former President Donald Trump had put them under. Biden made this decision just days after he arrived at the White House (January 2021–January 2025). Timothy Lenderking (*), the United States' Special Envoy to Yemen, has been traveling to various nations since the end of February 2022 in an effort to persuade the warring parties to agree a comprehensive ceasefire that would open the door to renewed talks overseen by the UN.

However, although 2021 was filled with battles and fighting between Yemen's political groups, the shaky peace has been halting the hostilities between the Houthis and other parties since 2022. From both the west and the south, the Houthi troops moved on Marib, seizing the key tribes' strongholds that were fighting alongside the government. Only one shaky base remained in the control of the government forces in Al-Jawf after the Houthis drove them nearly all into the governorate's eastern deserts. In the meantime, the government armed units in the governorates of Marib, Taiz, and Shabwa have long been under the influence of Islamic Islah Party members. Late September 2021, The Houthi took control of the districts of Ain, Bayhan, and Usaylan in the northwest of the governorate after the Islah Party-aligned government forces swiftly left Shabwa, the southern Yemeni government's stronghold, after the Houthi forces advanced from the Al-Bayda Governorate. They proceeded to launch their second significant assault on Marib in 2021 [4], but once the ceasefire ended in 2022, the combat did not return to "pre-truce levels." Saudi-led coalition airstrikes in Yemen and cross-border Houthi assaults on Saudi Arabia stopped. Over 377 thousand people had died in the conflict, with approximately 60% of the deaths being attributable to a lack of access to food, water, and medical treatment. The humanitarian crisis persisted until 2024. Timothy Lenderking, the Special Envoy to Yemen, said he [5]:

• Sought to transform the truce into a permanent ceasefire

• Backed UN mediation and made a political settlement possible

• Enhanced the humanitarian and economic circumstances

• Offered a structure for peace negotiations

In August 2022, in response to Lenderking's efforts, the United Nations called upon Hans Grundberg (*), a Swedish diplomat and European Union envoy to Yemen. He made an effort to bring the government and the Houthi organization to a truce, which had a number of effects, including (6):

• Commercial resumption flights from Sana'a Airport.

• Longest period continuation of relative calm and a cessation of fighting since the beginning of the war.

• A significant decline in the number of casualties.

• Allowing fuel imports to flow through the port of Hodeidah.

• Framework agreements to unblock highways leading to the besieged city of Taiz were also included in the pact.

• The payment of arrears of salaries to public sector employees working in areas under both government and Houthi control (it is worth noting that employees of the bloated public sector have suffered from long delays in their salaries during the ongoing conflict, amid the dire need for financial aid experienced by civilians across Yemen).

Grundberg spent weeks of meetings with local, regional and international actors, with the exception of the Houthis (*), before briefing the UN Security Council in December of the same year, outlining the approach he would follow. Grundberg prioritized de-escalation, prioritized economic relief, urged the warring parties to dialogue and concluded that only a negotiated settlement could resolve the conflict in Yemen and provide the guarantees the region, including the Red Sea, needed [7].

Second Requirement: Economic Developments

It is necessary to shed light on the economic conditions that Yemen has experienced during the ongoing war between the government and the Houthis before the need for a truce between the two parties, as indicated above, and the outcomes it has reached, emerges. The significant decline in the value of the Yemeni riyal in areas controlled by the Yemeni government was one of the most prominent economic developments witnessed in Yemen in 2021. The decline in the value of the riyal led to [8]:

• A rapid rise in prices.

• A deterioration in the standard of living of citizens.

• The growing conflict over monetary policy with the Central Bank of Yemen in Sana'a, which is controlled by the Houthis.

• The main cause of the riyal's decline in value is the Yemeni government's ongoing efforts to reduce the country's massive budget deficit by printing more Yemeni riyal banknotes at the Central Bank of Yemen in Aden to pay for ongoing costs, many of which are related to the public sector wage bill. The decrease in foreign currency reserves has made the growing local currency supply in Yemeni government-controlled areas worse. In the northern areas, the situation was quite different because the Houthi authority left [9]:

• Paying civil service salaries.

• Increasing their collection of customs and tax revenues.

• The economic power that enables the Houthis to access the majority of the nation's current foreign cash flows in the form of remittances and humanitarian financial help to Houthi-controlled regions has benefited them since they dominate commercial business hubs and heavily inhabited areas.

As for general economic situation in Yemen, it can be summarized as follows [10]:

• A significant decline in the currency exchange rate in many parts of Yemen.

• The effects of inflation were clearly evident in rising prices and deteriorating living standards.

• The dynamics of the fuel market and oil production, as it became clear that the warring parties were competing for control of fuel imports, which stimulated rising prices, domestic oil and gas production, and Yemen's trade balance.

• Competition over customs revenues.

• US sanctions against the Houthis and their allies.

From here, Yemen became divided into a clear struggle for power between Islah and the separatist Southern Transitional Council (STC). Saudi Arabia's confidence in their performance and ability to manage local governance waned, especially after the STC was reluctantly incorporated into the unity government. The government became politically and militarily beholden to it. In order to establish its dominance inside government institutions—which it promoted as the cornerstone of a potential southern state—the STC persisted in tightening its grip over Aden. With the north, the Houthi stronghold where they had established their control, growing more determined to reshape Yemeni state and society in accordance with their Zaidi ideology, the STC, an internal opposition movement with actual power, faced tremendous challenges in striking a balance between the need to establish its authority on the ground, appease coalition supporters, and appease its separatist base. Owing to its military victories, the Houthi leadership aimed to bolster its authority over public funds and state institutions, stifle rival power centers, and solidify the fundamentals of the de facto state bureaucracy by moving a sizable portion of its supporters from the Houthi stronghold in Saada Governorate to Sana’a [11].

Lastly, it may be claimed that the ceasefire was prolonged twice, for an extra two months each in June and August. The reopening of the highways leading to the besieged city of Taiz, however, was the subject of unsuccessful discussions with the Houthis. Despite repeated exchanges of proposals and counter-proposals, no agreement was reached. The Houthis persisted in their military actions to seize control of the final route connecting the city to Aden, the temporary capital, throughout the talks. However, as a prelude to a more comprehensive deal, it appeared that Saudi Arabia and the government would soon reach an agreement on the payment of public sector employees' wages from oil income. However, the negotiations were hampered by the Houthis' last-minute demand to add army and security force personnel who were hired during the conflict to the payroll, which finally caused the truce to end on October 2, 2022 [12]. As a result, regional and international attempts to mediate a settlement between the conflict's sides were crushed, and things continued as they were, devoid of combat and military operations on the ground. Many Yemenis are becoming even more impoverished as the country's economic position worsens due to the political process's stutter. According to a World Bank assessment published on October 31, 2024, the Yemeni government's fiscal receipts in the first half of 2024 fell 42% as a result of the Houthi embargo on oil exports, making it impossible for it to provide the populace with basic services. Resuming oil exports and restoring unfettered internal transit, trade, and finance "appear remote," the study said, given Yemen's unstable environment, which includes the impacts of regional escalation and the economic war conducted by both parties against one another. Nonetheless, the Council stressed that "a rapid economic recovery, backed by outside aid, reconstruction initiatives, and post-conflict reforms, could be made possible by a sustainable truce and peace agreement.  Grundberg reportedly mentioned his efforts to clear the path for potential advancements in the future economic recovery during the meeting on November 13, 2024. These efforts included the restart of oil and gas exports and the resumption of pension payments to public officials.

Yemen's Future After the Truce

The Houthi Role in 2023

It appears that the Houthi role has shifted from internal fighting to an open war with missiles targeting ships and tankers passing through the Red Sea, due to the Houthis' control of the port of Hodeidah. What does this mean?

To answer this question, it can be said that with the cessation of hostilities at the local level, the conflict has taken a different direction, particularly the pursuit of control over the Yemeni economy. This change became apparent with the rejection of the Houthis' last-minute request to include military personnel in the public sector payroll. The result of this rejection was the targeting of oil tankers anchored at the southern ports in late October and November, with the aim of harming government revenues. This approach was relatively successful, as the attacks effectively halted oil and gas exports in light of the threat to the ships, and with it, the main source of government revenue was halted indefinitely [13].

The humanitarian situation in Yemen has deteriorated to critical levels due to the lack of salaries and the suspension of oil and gas exports. Indeed, both parties to the conflict have suffered from these conditions, for which they were both directly responsible. Accordingly, one of the steps taken by the Yemeni government was to designate the Houthis as a terrorist organization, after having been removed from the list in 2021.

Have regional efforts to resolve the Yemeni crisis stalled? The answer is no. The Kingdom of Saudi Arabia intervened, with Oman as a mediator, to reach a solution through Saudi-Houthi negotiations. By April 2023, reports indicated an imminent agreement between the two parties on some outstanding issues demanded by the Houthis, which the Yemeni government was forced to implement. These included paying the salaries of public sector employees, even in areas under Houthi control (the northern regions of Yemen), and discussions framing a final settlement to the conflict, albeit with partial solutions. These solutions include the participation of all parties, including Saudi Arabia, in securing salaries, opening airports and ports, and leaving the deeply contentious issues for another round of negotiations [14]. However, what happened was different from what the efforts and negotiations aimed for, following the attack launched by Hamas on Israel on October 7, 2023, and the subsequent Israeli military operations in Gaza, which continued until July 2025. This prompted the Houthis to intervene militarily and target Israeli territory, in addition to targeting commercial vessels crossing the Bab al-Mandab Strait. This prompted the UN Security Council to adopt Resolution 2722 on January 10, 2024, urging the Houthis to cease attacks on waterways, especially in the Red Sea and its surrounding areas [15]. Prior to the closed consultations on November 13, 2024, the Security Council unanimously adopted Resolution 2758 [16], a direct renewal of the Yemen sanctions regime under Resolution 2140, which imposes a travel ban and an assets freeze for a period of one year from the date of adoption of this resolution against individuals or entities identified by the Committee who commit or provide support for acts that threaten the peace, security, and stability of Yemen. It also establishes a Panel of Experts for an initial period of months [17]. The Houthis have continued to launch numerous attacks on international shipping since October 2023, as a step to force Israel to end its war with Hamas. This has further complicated the situation. While the United States seeks to restore security in the Red Sea corridor, the underlying conflict in Yemen, which remains unresolved, has emerged as a long-term threat to the region. This, in reference to the Houthis, prompted US President-elect Donald Trump in March 2025 to launch an expanded campaign of military strikes against Houthi targets. On March 6, 2025, the UN Special Envoy to Yemen, Hans Grundberg, stated that the parties to the conflict were "openly preparing for a military confrontation. He noted the US redesignation of the Houthis as a foreign terrorist organization, saying, "We are at a stage where the fear of a return to full-blown conflict is palpable. On March 17, 2025, the UN Secretary-General expressed his concern about the new US strikes in Yemen, saying that the UN "calls for maximum restraint and a cessation of all military activities. Any further escalation could lead to further escalation." Regional tensions.

The Second Requirement - The Government's Role in 2023

Yemen lacks a strong central government that has complete authority over its land, and any functioning government institutions are run by armed groups and unelected officials. Founded in 2023, the Yemeni Legislative Council is mostly dependent on Saudi Arabia and the United Arab Emirates, which also have cordial ties with other anti-Houthi organizations. Throughout the conflict, Saudi and Emirati forces have taken control of a number of vital regions of Yemeni territory, notably Socotra Island and Al Mahrah Governorate, respectively. A member of the Southern Transitional Council was chosen governor of Socotra by the Yemeni Legislative Council in July 2022, ostensibly reaffirming the UAE's and the Southern Transitional Council's local domination. In 2020, anti-Houthi forces created a power-sharing administration that includes:

• The General People's Congress (GPC), which is associated with Abd Rabbuh Mansur Hadi, the president of Yemen.

• The United Arab Emirates-backed separatist organization known as the Southern Transitional Council. 3. The Party of Islah.

• The Party of Socialism. 

• Several independents and tiny parties. Rashad al-Alimi, who was the former President Saleh's Interior Minister and had close relations to Saudi Arabia, led the Yemeni Legislative Council when it was founded in April 2022. 

Aidarous al-Zubaidi, the leader of the Southern Transitional Council; Sultan Ali al-Arada, the governor of Marib Governorate and an Islah Party member; and Tariq Saleh, the nephew of the former president, are among the other council members. As of 2023, the Southern Transitional Council was the largest group in the Yemeni Legislative Council, with three seats held by its MPs. Because it is subordinate to the Kingdom of Saudi Arabia's executive power, this government configuration has a flaw that renders it entirely reliant on Riyadh and Abu Dhabi for both military and financial backing. This is on top of the United Arab Emirates' concerns about Saudi Arabia's support for the Houthis, which raise questions about whether a government for them is being planned. In addition to its other financial commitments to the Yemeni government, Abu Dhabi recently concluded a significant arms deal to better equip government forces, which sparked these concerns about the potential for a Saudi-Houthi agreement to pay salaries and aid in reconstruction in exchange for stopping attacks on Saudi territory. The Houthis were able to repair infrastructure damage and regroup their troops in May 2025 when the US ended its high-intensity air campaign against them, code-named Operation Rough Knight. On the other hand, the internationally recognized Yemeni government may suffer if conflict between the US and the Houthis were to end. More significantly, the post-ceasefire situation may jeopardize the Southern Transitional Council (STC), which is pro-secession and officially united with the central government. The STC is supported by the United Arab Emirates (UAE), and its forces are best equipped to launch a ground offensive against the Houthis, as was the case ten years ago. In addition to rising public dissatisfaction in Aden and other key southern towns as a result of worsening economic conditions, Saudi-backed forces in the strategically important Hadramawt Governorate are also posing a threat to the STC's dominance.

Why the UAE-backed troops were so open to a Yemeni ground assault against the Houthis in early 2025 is highlighted by the present issues and the worsening short- and medium-term prospects. The Yemeni Legislative Council's vice president, Tariq Saleh, who leads the armed National Resistance Force, emphasized the "need to provide stronger support to the Yemeni forces on the ground." The STC has openly supported US bombings.  However, this renewed ground campaign did not materialize for several reasons: primarily because the United States was reluctant to provide coordinated air cover for the Yemeni forces, but also because Operation Rough Rider proved more difficult than Washington had anticipated, and because of Saudi fears of reopening a "Pandora's Box" that could expose the Houthis to retaliation on its territory. Now, Israel is the only party still striking Houthi targets, albeit intermittently.

After the internationally recognized government and the Houthis failed to extend and renew UN brokered truce, Yemen has been in an uneasy quiet since October 2, 2022. Both sides have not indicated a desire to begin talks to settle a war that the UN says has killed hundreds of thousands of people and driven millions closer to starvation despite years of diplomatic efforts. However, with the US missile strikes halted, the Houthis can now focus on three interconnected issues, all of which are useful for consolidating and possibly expanding their territorial controlIn order to enable the resumption of revenue flows, arms deliveries, and the reorganization and redeployment of forces as needed, they can first attempt to repair the damage that US and Israeli strikes have caused to important port and airport infrastructure in Houthi-controlled areas (mainly Hodeidah and nearby Red Sea ports, as well as Sana'a International Airport).Second, a ceasefire may enable the Houthis to consolidate an emerging strategy of diversifying alliances. The group has established a prominent presence since 2023 by attacking ships in the Red Sea, threatening international trade, and then bringing a global superpower to the negotiating table to reach a truce. This has made the Houthis a desirable partner for a range of players with whom they share common ground, whether ideologically or for strategic considerations.

1. Al-Ghabari, Mohammed, and Ahmed Talaba. "Yemen's President Relieves Deputy Council as Saudi Arabia Seeks to End War." Reuters, April 2022.

2. Al-Faqih, Ihsan. After the Houthis Rejected It... What Is the Fate of the Saudi Initiative in Yemen? 2021.

3. "Timothy A. Lenderking." U.S. Department of State, Bureau of Near Eastern Affairs, 2021–2025.

4. Yemen Report: Coalition Withdraws from Hodeidah and Fighting Shifts South. Sana'a Center for Strategic Studies, November 2021, p. 6.

5. Yemen: Conflict, Red Sea Attacks, and US Policy. Congressional Research Service, April 2025.

6. Yemen: Political Will, Responsible Leadership Needed to End 7-Year War. United Nations News, January 2022, https://news.un.org/en/story/2022/01/1109642.

7. Office of the Special Envoy of the Secretary-General for Yemen. Briefing of UN Special Envoy Hans Grudenberg to the United Nations Security Council. June 2025.

8. Central Bank of Yemen. 2022 Annual Report, p. 14.

9. Developments in the War – Yemen Report – January and February 2022. Sana'a Center for Strategic Studies, April 2022, https://sanaacenter.org/ar/the-yemen-review/jan-feb-2022/17277.

10. New Saudi Game in Yemen: Holding Employee Salaries Hostage. July 2023.

11. "New Saudi Game in Yemen: Holding Employee Salaries Hostage." Alwaght, http://alwaght.net/en/News/241083/New-Saudi-Game-in-Yemen-Holding-Employee-Salaries-Hostage.

12. Last-minute Houthi Demands Thwart Truce Extension Talks. Yemen Report for September 2022, Sana'a Center for Strategic Studies, October 2022, https://sanaacenter.org/ar/the-yemen-review/september-2022/18937.

13. Prospects for Negotiations between Saudi Arabia and the Houthis towards an Agreement to End the Yemeni War. Arab Center for Research and Policy Studies, April 2023, p. 4.

14. Security Council Resolution 2722 of 2024 (Maintenance of International Peace and Security). United Nations, 2024.

15. Unanimously Adopting Resolution 2758 (2024), Security Council Renews Sanctions, Panel of Experts Concerning Yemen. United Nations, November 2024, https://press.un.org/en/2024/sc15896.doc.htm.

16. United Nations: US Raids on Yemen Exacerbate the Deteriorating Humanitarian Situation. April 2025, Peace and Security, https://news.un.org/ar/story/2025/04/1140861.

17. Ardemagni, Eleonora. The Balance on Power in Yemen after the US–Houthi Cease-fire. Middle East Institute, June 2025, https://mei.edu/publications/balance-power-yemen-after-us-houthi-cease-fire.