Gulf countries condemn Houthi takeover in Yemen as a 'coup'

SANAA (Reuters) - The Gulf Cooperation Council has accused Shi'ite Houthi rebels of staging a coup in Yemen after they announced they were dissolving parliament and forming a new government, Kuwait's official news agency said on Saturday.

The opposition of the GCC, a six-nation bloc comprising energy-rich Gulf states, may signal growing isolation for the impoverished Yemen and reflects Sunni Muslim hostility towards the Iranian-backed Houthi militant group.

"This Houthi coup is a dangerous escalation which we reject and is unacceptable. It totally contradicts the spirit of pluralism and coexistence which Yemen has known," the GCC was quoted as saying by KUNA news agency.

The GCC called the takeover a "threat...to the security and stability of the region and the interests of its people."

Yemen's dominant Houthi movement dissolved parliament on Friday and said it would set up a new interim government.

The country has been in political limbo since the president and prime minister resigned last month after the Houthis seized the presidential palace and confined the head of state to his residence in a bid to tighten their control over the country.

Yemen's instability has drawn international concern as it shares a long border with top world oil exporter Saudi Arabia, and the country is also fighting one of the most formidable branches of al Qaeda with the help of U.S. drone strikes.

Tensions ran high in the capital on Saturday, with armed Houthis out in force near main government buildings.

A rudimentary bomb exploded outside the republican palace in downtown Sanaa, wounding three Shi'ite Muslim militiamen, eyewitnesses said. Once the home of the resigned Yemeni prime minister, the palace now houses Mohammed al-Houthi, a top official in the Houthi military wing.

There was no immediate claim of responsibility for the blast, but Sunni Muslim militants in al-Qaeda in the Arabian Peninsula (AQAP) have repeatedly clashed with the increasingly powerful Houthis, raising fears of an all-out sectarian war.

Separately, thousands of demonstrators gathered in three cities in central Yemen to protest the Houthis seizing power. Houthi gunmen dispersed dozens of activists near the capital's main university by firing into the air.

Protesters chanted slogans calling the Houthi moves a "coup" and demanded the group withdraw its forces from major cities.

The Houthis entered Sanaa in September and began to fan out into more cities in Yemen's south and west. Their spread has destabilised the country's fragile security forces and stoked anger among tribal fighters allied to AQAP.

Four Houthi fighters were killed in a suspected AQAP attack in the southern al-Bayda province on Friday, while army forces clashed with tribesmen and AQAP fighters in a neighbouring district on Saturday.

(Additional reporting by Omar Fahmy and Noah Browning; Editing by Crispian Balmer)

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