Yemen’s exiled president has reportedly rejected a deal to place the Houthi rebel-controlled city of Hodeidah under UN jurisdiction, raising fears for the country’s civilian population as the time allocated for ceasefire talks begins to run out.

The United Nations-brokered negotiations are ongoing as of Thursday, a source close to the talks told The Independent, but all parties have so far been unable to agree on the terms of a truce which would avoid further fighting in the vital port city.

Hodeidah, on Yemen’s Red Sea coast, is a vital lifeline for the country’s embattled population. Since the war broke out in 2015 more than 22 million people have become dependent on aid to survive, and around eight million of that figure live on the brink of famine.

Civil society has collapsed, with of doctors and teachers going unpaid, and the country is in the grip of the worst cholera epidemic in modern history.

Footage shows gunfire at Yemeni port town Hodeidah

An estimated 80 per cent of the country’s food, medicine and other imports flows through Hodeidah, leaving aid agencies sounding the alarm that any damage or hold up in the flow of goods could push Yemen into total collapse.

The Arab coalition fighting to regain control of Yemen – led by the exiled government, Saudi Arabia and UAE – launched a massive operation to retake the city earlier this month, which it hopes will clear a path to driving rebels out of the capital, Sanaa, and end the stalemate in the three-year-old war.

Sky News Arabia reported late on Wednesday night that Yemeni president Abdrabbuh Mansur Hadi rejected the second of two offers from Houthi rebels, which would allow the Iran-backed forces to remain there but under UN supervision.

“Houthis not treated like any other terrorist militia and have dialogue with UN and opportunity to negotiate political process. Yet in threatening civilians behave like any other terrorist organisation,” UAE foreign minister Anwar Gargash tweeted. “International community must hold them to account.”

On the ground, civilians with the funds to do so are fleeing Arab coalition bombing, which activist Tawfeeq Hazmal said was near constant around southern neighbourhoods and Hodeidah airport compound.

“The situation is deteriorating very quickly,” he told The Independent.

“Most families don’t have the money to relocate outside the city, they will stay in their homes, waiting to die from hunger or bombing.”

At least 300 people are believed to have died since fighting began in earnest on 13 June. On Wednesday, footage widely circulated in Yemeni media showed the burning remains of a bombed bus, which was reportedly hit by a coalition airstrike on Tuesday while carrying displaced civilians from Hodeidah to Taiz. The attack killed at least nine people.

The situation in Yemen Show all 14 1 /14 The situation in Yemen The situation in Yemen Houthi supporters trample on a US flag during a gathering mobilizing more fighters into several Yemeni battlefronts, in Sana'a, Yemen EPA The situation in Yemen People carry the coffins of men, who were killed in the recent Saudi-led airstrikes during their funeral, in the Old City of Sanaa, Yemen AP The situation in Yemen Pro-government fighters give food to Yemeni children on the road leading to the southwestern port city of Mokha. Yemeni rebels are putting up fierce resistance in a key Red Sea port city where they are encircled by pro-government force Getty Images The situation in Yemen A Yemeni stands in front of a graffiti protesting US military operations in war-affected Yemen, in Sana'a, Yemen. According to reports, US Special Forces troops allegedly disembarked from US helicopters in the Yemeni town of Yakla and attacked several houses belonging to members of the terrorist group Al-Qaeda, killing three high-ranking Al-Qaeda members and nine civilians, six women and three children. One American serviceman has been killed and three injured in the attack EPA The situation in Yemen US Special Forces troops allegedly disembarked from US helicopters in the Yemeni town of Yakla and attacked several houses belonging to members of the terrorist group Al-Qaeda, killing three high-ranking Al-Qaeda members and nine civilians, six women and three children. One American serviceman has been killed and three injured in the attack EPA The situation in Yemen A Yemeni female fighter supporting the Shiite Huthi rebels, and carrying weapons used for ceremonial purposes, takes part in an anti-Saudi rally in the capital Sanaa Getty Images The situation in Yemen Yemeni female fighters supporting the Shiite Huthi rebels, and carrying weapons used for ceremonial purposes, take part in an anti-Saudi rally in the capital Sanaa Getty Images The situation in Yemen A boy shouts slogans next to pro-Houthi fighters, who have been injured during recent fighting, during a rally held to honour those injured or maimed while fighting in Houthi ranks in Sanaa, Yemen Reuters The situation in Yemen Balls of fire and smoke rise from a Houthi-held military camp following alleged Saudi-led airstrikes, in Sana'a, Yemen EPA The situation in Yemen Yemenis search under the rubble of damaged houses following reported Saudi-led coalition air strikes on the outskirts of the Yemeni capital Sanaa Getty Images The situation in Yemen A Yemeni boy looks on as Yemenis search under the rubble of damaged houses following reported Saudi-led coalition air strikes on the outskirts of the Yemeni capital Sanaa Getty The situation in Yemen A Yemeni boy sits amidst the rubble of damaged houses following reported Saudi-led coalition air strikes on the outskirts of the Yemeni capital Sanaa AFP/Getty The situation in Yemen Marine One with US President Donald Trump flies with a decoy and support helicopters to Dover Air Force Base in Dover, Delaware, for the dignified transfer of Navy Seal Chief Petty Officer William 'Ryan' Owens who was killed in Yemen Getty Images The situation in Yemen US President Donald Trump aboard the Marine One to greet the remains of a US military commando killed during a raid on the al Qaeda militant group in southern Yemen on Sunday, at Dover Air Force Base, Delaware, US Reuters

Overnight the coalition dropped leaflets on Hodeidah’s 600,000 residents warning them to stay out of the city centre, sparking fears the full-scale assault will resume soon. Residents say the Houthis are preparing for an urban battle, planting landmines, digging out trenches and placing snipers on the roofs of residential buildings.

Also on Wednesday, the UN secretary-general’s office released its annual Children and Armed Conflict report, which found for the second year in a row that the Arab coalition is responsible for the majority of child deaths in Yemen in 2017 – 370 out of a verified total of 552 – although the report noted the true figure is likely to be much higher.

In a statement, Save the Children said the Arab coalition this year has been placed in a new section of the report “reserved for parties that have put in place measures aimed at improving the protection of children”.

Devastation on the ground in Yemen displayed by International Rescue Committee in shocking video

Most western governments continue to sell munitions to Saudi Arabia and the UAE destined for use in Yemen’s war, which rights groups say could amount to war crimes. The coalition has managed to hit schools, medical facilities, weddings and funeral gatherings in the past.

“While the Saudi/Emirati-led coalition is still listed for killing and maiming children in Yemen, clearing it of attacks on schools and hospitals when the evidence shows otherwise is deplorable,” Save the Children CEO Kevin Watkins said.