Saudi-led warplanes launched new strikes in Yemen Wednesday, hours after Riyadh announced a halt to the four-week air campaign, as rebels seized a key loyalist base in the third city Taez.
The Saudi-led coalition had warned it stood ready to counter against any advance by the rebels and their allies even after it ended Operation Decisive Storm from midnight (2100 GMT Tuesday).
Ground fighting between the rebels and forces loyal to exiled President Abedrabbo Mansour Hadi raged on in a string of battleground towns, including the second city of Aden as well as Taez, in a blow to US-led calls for renewed peace talks.
In Taez, the rebels took advantage of the lull in air strikes to overrun the headquarters of the 35th Armoured Brigade, loyal to Hadi, which they had besieged for nearly a week, an army officer said.
The Saudi-led coalition hit back with air strikes against rebel positions inside the captured camp and elsewhere in the city.
The fighting left "dozens dead and wounded", the officer told AFP.
The World Health Organization says at least 944 people have been killed in Yemen since March 19 and there were calls from all sides for the urgent delivery of humanitarian aid.
Riyadh said the strikes, which it launched on March 26 as the rebels closed in on Hadi's last refuge in Aden, had succeeded in eliminating the threat posed to Saudi Arabia and its neighbours by the rebels' air and missile capabilities.
But rebel forces remain in control of the capital Sanaa and swathes of the country and Hadi is still in exile in Riyadh, where he fled when the raids began.
The coalition said its operations would now enter a political phase with the focus on the resumption of talks, aid deliveries and "fighting terrorism".
Al-Qaeda's Yemen branch, regarded by Washington as its most dangerous, has taken advantage of the air war and ground fighting between the rebels and Hadi loyalists to consolidate its grip on Hadramawt province in the southeast.
Seven suspected Al-Qaeda militants were killed in an apparent US drone strike on the provincial capital Mukalla, which the jihadists overran earlier this month, witnesses and a local official said.
US Defence Secretary Ashton Carter has acknowledged that Al-Qaeda is gaining ground but has vowed that the longstanding US drone war will go on.
Washington welcomed the end of the Saudi-led air campaign to which it had given intelligence and logistical support.
"The United States welcomes today's announcement by the government of Saudi Arabia and its coalition partners of the conclusion of Operation Decisive Storm in Yemen," National Security Council spokesman Alistair Baskey told AFP.
"We continue to support the resumption of a UN-facilitated political process and the facilitation of humanitarian assistance."
UN-brokered talks between the warring parties broke down in February when Hadi fled to Aden after the Houthis seized power in the capital.
Hadi's ousted predecessor Ali Abdullah Saleh, who has provided key support to the Shia rebels, said he hoped the halt to the air war would lead to a return to dialogue.
"We hope that everyone will cooperate to return to dialogue, to find solutions other than placing losing bets that are wrong and costly," he said.
Army units which remained loyal to Saleh after his ouster in 2012 following a bloody year-long uprising have provided crucial support to the rebels in their advance across much of the country.
In an apparent goodwill gesture, the rebels freed three top commanders -- including the defence minister and a brother of Hadi -- whom it had captured during the fighting over the past month, mediators said.
Iran offered its help in bringing the sides back to the negotiating table.
"Positive developments in Yemen should be followed by urgent humanitarian assistance, intra-Yemeni dialogue & broad-based govt. Ready to help," Foreign Minister Mohammad Javad Zarif tweeted from New York.
In a televised speech from his refuge in Riyadh, Hadi thanked the coalition for its support and refused to give up hope of returning from exile.
"We will soon return to our homeland, to Aden and Sanaa," he said.
He called on all sides to work to implement a resolution adopted by the UN Security Council last week which imposed an arms embargo on the rebels but "which paves the way for positive and effective dialogue".