The United Nations envoy to Yemen on Sunday urged political rivals there to form a new government within days to head off rising "sectarian tensions" in the violence-hit country.
In an interview with AFP, Jamal Benomar called for a new lineup to be formed "within a few days", after weeks of clashes pitting Sunni tribes and Al-Qaeda against Shiite rebels seeking to expand their territory.
"Recent developments have brought on a new discourse that is xenophobic, sometimes sectarian, and this is a worrying trend," Benomar said from Sanaa.
"This didn't happen in the past... The only way forward is for all sides to cooperate to establish a new government and to move forward the implementation of the peace partnership agreement" reached on September 21.
"Failure to pursue this would mean an increase in sectarian tensions" between Sunnis and Shiites, he warned.
Chaos in the impoverished Arabian Peninsula nation was compounded when Ansarullah Shiite fighters seized Sanaa in September and later expanded their sphere of influence into central and west Yemen.
On Friday, Ansarullah increased pressure on President Abdrabuh Mansur Hadi by giving him 10 days to form a new government or face the creation of a "national salvation council".
On Saturday, the rebels and their political rivals signed a deal -- in Benomar's presence -- mandating Hadi and Prime Minister Khalid Bahah to form a government and agreeing to support it.
Benomar acknowledged that "the new government is going to be facing a very daunting, complex challenge", highlighted by the country's "very dire" economic situation.
"Serious economic problems are emerging," he said. "It is not very clear whether the state would be able to continue to pay its civil servants after the end of the year."
'ROADMAP' FOR SOLVING CRISIS
They met with almost no resistance from the security forces as they overran the capital and other major cities farther south.
The rebels' Zaidi sect, an offshoot of Shiite Islam, makes up approximately a third of Sunni-majority Yemen's population.
Signup to our newsletter and follow us on Facebook and Twitter!
Apart from the October 13 appointment of Bahah as premier, the UN-sponsored September 21 peace deal with the rebels has remained a dead letter.
Under the agreement, the rebels were to withdraw from Sanaa and disarm once a neutral premier was named.
"This agreement provides a roadmap for getting out of this crisis," Benomar said.
"If all parties, including Ansarullah, cooperate, implementation of the agreement will enable the state to regain its authority."
However, "if there are disagreements... or violations of this agreement, the situation will be more complicated and more dangerous. I hope we will not reach this stage."
After overruning Sanaa, the rebels moved west to the Red Sea port of Hudeida and to Shiite-populated Dhamar and neighbouring Ibb, where clashes with Sunni tribesmen killed dozens last month.
The rebel moves have increased the threat of open confrontation with Al-Qaeda.
Benomar warned of "Al-Qaeda becoming more bold and active with a potential to grow more".
Al-Qaeda's Yemen-based franchise, considered by Washington to be the extremist network's deadliest branch, has vowed to fight the rebels in defence of Sunni Muslims.
Yemen is also facing a southern separatist movement emboldened by the expansion of Shiite rebel control further north.
On October 14, activists began a campaign of protests, including an indefinite sit-in demonstration in Aden, the capital of the former South Yemen.
Benomar spoke of a "big challenge in the south" which "is becoming a flashpoint and with a new, much stronger, separatist trend."
The south was independent between the end of British colonial rule in 1967 and union with the north in 1990. A secession attempt four years later sparked a brief but bloody civil war that ended with northern forces occupying the region.
The separatists and the Huthis have rejected plans for Yemen to become a six-region federation.