Adds quotes, details on standoff, previous DUBAI

RIYAD, Nov 5 (Reuters) - Yemen's Saudi-backed government and southern separatists signed an agreement on Tuesday to end a power struggle in the south of Yemen that Saudi Arabia's crown prince hailed as a step towards a wider political solution to end the multi-faceted conflict.

The standoff had opened a new front in the more than four-year-old war and fractured a Saudi-led coalition battling the Houthi movement that ousted the government of Abd-Rabbu Mansour Hadi from power in the capital, Sanaa, in the north in late 2014.

"This agreement will open, God willing, broader talks between Yemeni parties to reach a political solution and end the war," Crown Prince Mohammed bin Salman said in a televised signing ceremony in Riyadh.

No details were given but sources familiar with the talks hosted by Saudi Arabia for over a month had said the deal calls for a government reshuffle to include the separatists'Southern Transitional Council (STC) and placing tens of thousands of its troops under government control.

Separatist forces, supported by Riyadh's main coalition partner the United Arab Emirates, are part of the Sunni Muslim alliance that intervened in Yemen in March 2015 against the Iran-aligned Houthis who control Sanaa and most urban centres.

But the STC, which seeks self-rule in the south and a say in Yemen's future, turned on Hadi's government in August, seizing its interim seat in the southern port of Aden and trying to extend its reach in the south.

United Nations envoy Martin Griffiths, who is trying to restart talks to end a war that has pushed Yemen to the brink of famine, said the deal was an important step in peace efforts.

"Listening to southern stakeholders is important to the political efforts to achieve peace in the country," he said in a tweet.

(Reporting by Marwa Rashad; writing by Aziz El Yaakoubi; Editing by Ghaida Ghantous and Angus MacSwan)

((aziz.elyaakoubi@thomsonreuters.com; +971552994086; Reuters Messaging: aziz.elyaakoubi.reuters.com@reuters.net))

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