Yemen's Prime Minister Ahmed Obeid bin Daghr (C) attends a news conference in Riyadh, Saudi Arabia May 18, 2016. REUTERS/Faisal Al Nasser Image Credit: REUTERS

Riyadh: Yemen’s Prime Minister Ahmed bin Dagher on Wednesday rejected a unity government proposed by Iran-backed Al Houthi militants whom he accused of bringing the country’s economy to the brink of collapse.

At the start of a cabinet meeting in the Saudi capital, Bin Dagher emphasised that the Al Houthi militants should surrender their weapons and withdraw from seized territory in accordance with a United Nations Security Council resolution adopted in April last year.

Al Houthi militants and their allies overran the capital Sana’a in September 2014 and went on to seize control of several regions, forcing President Abd Rabbo Mansour Hadi to flee to Saudi Arabia.

Saudi Arabia formed a regional coalition that began air strikes against the Al Houthi militants in March last year and later sent in ground forces to support Hadi’s government.

“The retreat (of the Al Houthi militants) from state institutions is non-negotiable,” the premier said.

The meeting was held inside a Saudi government hall where Dagher read from a statement with cabinet ministers seated at a long table in front of him.

At UN-brokered peace talks which began on April 21 in Kuwait, the Al Houthi militants made a transitional government of consensus a precondition for applying Security Council Resolution 2216.

But the prime minister attacked “those who want a national unity government before handing over the weapons”.

He added that the country is “in a terrible state of economic and monetary collapse” after Al Houthi militants spent $3 billion, almost the entire monetary reserves of Yemen, “in their war efforts”.

He said the Al Houthi militants also arranged to print more money, leading to a collapse in the value of the rial and a spike in prices.

Residents say fruit and vegetables have risen in price by at least 20 percent in recent days, while essentials like flour are up by more than 30 percent.

On Tuesday, Yemen’s government threatened to quit the peace talks.