Talks to end a violent power struggle in south Yemen have stalled and both sides appear to be preparing to resume fighting, officials said on Friday, suggesting more turmoil lies ahead on a new battlefront that risks further fragmenting Yemen.
Saudi Arabia, leader of an Arab coalition battling Yemen's Iran-aligned Houthis, is hosting indirect talks to resolve the crisis between separatists and the government.
The war for the south between the two nominal allies is threatening to complicate U.N. efforts to end the multi-tiered war, which contains conflicts within conflicts.
Saudi Arabia called on the separatists, who seek to revive the former South Yemen republic, to cede control of Aden and voiced its support for President Abd-Rabbu Mansour Hadi's government on Thursday, threatening "to react decisively".
Two Yemeni officials said the Saudi statement came after the talks, in the Red Sea city of Jeddah, reached a dead-end and both sides were gathering troops to prepare for further battle.
Leaders of the Southern Transitional Council (STC), rejected the inclusion of their forces under the authority of the government of Hadi, they said.
The STC has tens of thousands of fighters.
"The situation is headed towards war, so be ready people of the south... Talks have failed, war is declared," the STC's Security Belt forces said in a twitter post early on Friday.
The talks also stalled over the separatists' role in the government, after the separatists asked for the vice-president position along with two major ministries.
Yemen's current vice-president is Ali Mohsen Al-Ahmar, a politically powerful army general allied with Hadi.
Yemen's information minister, Moammar al-Eryani, declined to give details on the talks, but said "the STC's demands mean legitimising taking up arms against the State".
"We cannot accept the existence of armed groups outside the government's authority, it is against the constitution and the law," Eryani added.
STC spokesman did not immediately respond to Reuters' requests for comment.
The breakaway movement is part of the Saudi-led coalition that intervened in Yemen in March 2015 to restore Hadi's government which was ousted from power by the Houthis in the capital Sanaa in late 2014.
But the separatists seek independence and turned on the government in early August and captured Aden, its interim base. Southern fighters have clashed with government forces elsewhere in the south as they tried to extend their reach.
On Thursday, the separatists organised a rally in Aden where thousands of Yemenis gathered.
Saudi Arabia called on both sides to refocus on battling the Houthis, who hold the capital Sanaa and most major urban centres.
Saudi ambassador to Yemen Mohammed Al Jaber on Friday urged both sides to commit to the dialogue and avoid bloodshed.
But both sides are gathering troops and preparing military hardware for battle, local officials said.
In the oil-producing Shabwa province, government forces have been preparing to recapture the neighbouring Abyan region and the port city Aden.
*This story was edited by Ahram Online