Map showing ethno-religious areas in Yemen. Reuters

ADEN (Reuters) - Forces loyal to Yemen's president said they seized strategic buildings in the southern city of Aden on Monday after a five-hour battle, escalating a civil conflict that threatens to split the country in two.

The militias supporting Abd-Rabbu Mansour Hadi wrested control of parts of Yemen's economic hub including, sources said, its main power station and intelligence headquarters from security forces allied to the Houthi movement.

The country's north is dominated by the Shi'ite Muslim Houthis, who completed a takeover of the capital Sanaa last month, while in the south forces loyal to Hadi and separatists seeking to restore the former South Yemen appear to be in charge.

The Houthis forced Hadi to resign during their takeover, but he remains de jure president as parliament has yet to give its assent. They tried to dissolve the assembly two weeks ago, but its largest group, the General People'sCongress party (GPC) objected.

The GPC said on Monday it had withdrawn its objection, boosting chances of a consensus in multi-party talks inSanaa on picking a new national administration.

But while negotiations in Sanaa have dragged on, violence has escalated, filling the political vacuum left in January when the Houthis seized the presidential palace, also forcing Prime Minister Khaled Bahah's government to resign.

Tens of thousands of Yemenis demonstrated in several cities on Saturday against Houthi rule as clashes between Houthis and Sunnis in a southern region left 26 dead.

A frontal view of a tank barrel is seen as Shi'ite Houthi rebels stand on its turret, after they took over the compound of the army's First Armoured Division in Sanaa September 22, 2014 Khaled Abdullah Ali Al Mahdi/REUTERS



'SITUATION UNDER CONTROL'

In five hours of clashes overnight, sources in the Popular Committees of Aden run by Hadi's brother, Nasser, said they had also taken Aden's television station and the administrative building of its free trade zone, with the loss of three fighters.

The Popular Committees confirmed in a statement that several government buildings previously guarded by the security forces had been taken.

Aden's governor Abdel-Aziz bin Habtour, in remarks carried on a Defense Ministry news website, said clashes had take place but denied Hadi loyalists had taken over the television station.

"The situation is under control and what has happened is being dealt with," the site quoted the governor, whose political affiliations put him closer to Hadi than to the Houthis, as saying.

In past weeks, several countries including the United States, major European nations and Saudi Arabia have closed their embassies in Sanaa due to the wider unrest, with Turkey on Monday becoming the latest to withdraw its diplomats.

The United Nations Security Council on Sunday called for the Houthis to quit government institutions, threatening further steps if the violence does not stop.

But in the U.N.-brokered talks in Sanaa on Monday, the GPC said it withdrew its objection to the Houthi dissolution of parliament, raising hopes of an agreement to create a new assembly.

The parties were still in talks to agree on a presidential council and a new government.

(Reporting By Mohammed Mukhashaf; Additional reporting by Mohammed Ghobari in Sanaa, Writing By Maha El Dahan, editing by Sami Aboudi and John Stonestreet)