The Yemeni UN-backed government and the Southern Transitional Council (STC) signed here on Tuesday a Saudi-sponsored "Riyadh Agreement," Al Arabiya TV reported.
The signing ceremony was attended by Saudi Crown Prince Mohammed bin Salman Al Saud, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan, Yemeni President Abd-Rabbu Mansour Hadi, President of the STC Aidarus al-Zoubaidi, alongside other Arab and Western officials and ambassadors.
The Saudi crown prince described the agreement in a televised speech as "a step toward a political solution to end the war in Yemen."
The agreement between the two sides, which are united against the Iranian-backed Houthi militia, initiates a new stage of cooperation in the area under their control, he added.
The main points of the deal include the return of the exiled Hadi government to Aden within seven days, the unification of all military formations under the authority of the ministries of interior and defense, and the formation of an efficient government made up equally between the north and south of Yemen.
Mistrust abounds
The military coalition led by Saudi Arabia and the United Arab Emirates (UAE) intervened in Yemen in 2015 as the Huthi rebels closed in on Aden, prompting Hadi to flee into Saudi exile.
The conflict has since killed tens of thousands of people — most of them civilians — and driven millions more to the brink of famine in what the United Nations calls the world's worst humanitarian crisis.
The south was an independent state before being forcibly unified in 1990, and the STC has said it wants to regain its lost status.
The separatists have received support and training from the UAE, even though it is a key pillar in the Saudi-led coalition.
Abu Dhabi accuses Yemeni authorities of allowing Islamist elements to gain influence within their ranks.
The mistrust between the allies has posed a headache for regional powerhouse Saudi Arabia, which remains focused on fighting the Huthis who are aligned with Riyadh's archfoe Iran.
Nevertheless, Abu Dhabi Crown Prince Mohammed bin Zayed Al-Nahyan tweeted a picture of himself and Prince Mohammed walking hand in hand with Hadi after Tuesday's ceremony.
The Huthis have offered to halt all attacks on Saudi Arabia as part of a wider peace initiative, later repeating their proposal despite continued air strikes from the Saudi-led coalition.
The offer came after the Houthis claimed responsibility for attacks on September 14 against two key Saudi oil installations that temporarily knocked out half of the OPEC giant's production.
Riyadh and Washington, however, blamed Iran for the attacks — a charge denied by Tehran.Prime Minister Imran Khan has welcomed the conclusion of the landmark Riyadh Agreement as a result of the initiative taken by the Saudi leadership and supported by UAE government. Prime Minister Imran Khan in a tweet on Wednesday said that it is a crucial and important step forward towards a political solution and durable peace and security in Yemen. “We believe it is a crucial and important step forward towards a political solution and durable peace & security in Yemen,” the prime minister added. He said that Pakistan welcomes the conclusion of landmark Riyadh Agreement, terming it a “crucial” and “important” step forward towards a political solution and durable peace and security in Yemen. In the first official confirmation of dialogue between the two sides, a Saudi official said on Wednesday that Riyadh is in talks with Yemen’s Iran-backed Huthi rebels in a bid to end the country’s civil war.
The comment came after Saudi Arabia brokered a power-sharing agreement between Yemen’s internationally recognised government and southern separatists, which observers say could pave the way for a wider peace deal.