The head of a newly formed council in Yemen has vowed to establish a full government in the coming days, a move described by ambassadors of 18 nations, supporting UN-backed negotiations, as unconstitutional.

Saleh al-Samad, chairman of the Supreme Political Council, made the announcement on Saturday in an address to tens of thousands of people who rallied in the capital Sanaa calling for an end to the 16-month conflict.

At the rally, Samad outlined the council's plans for running the war-ravaged country, following the breakdown of the peace talks earlier this month.

"Economic affairs will be the priority of our work in the coming period," he told the crowd who waved Yemeni flags and chanted slogans against the war at Sanaa's Sabeen Square.

The announcement of the planned government triggered a response from a group of 18 nations' ambassadors, who condemned the decision as "unconstitutional and unilateral actions in Sanaa".

"The Group of Ambassadors repeats its concern that actions taken by elements of the General People's Congress and the Houthis, as well as their supporters, are making the search for a peaceful solution more difficult," the group said in a statement posted on Facebook.

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The 10-member Supreme Political Council, which was formed in July, is composed of rebel Houthis and allies loyal to former Yemeni president Ali Abdullah Saleh.

Last week, the Houthis convened the country's parliament for the first time in two years, angering President Abd Rabbu Mansour Hadi, who called it a "violation" of the country's constitution.

In an interview with Al Jazeera, Hakim Al Masmari, editor-in-chief of the Yemen Post, said that the new government could be headed on a direct collision course with the government-in-exile of President Hadi.

Collision course

"This could devastate the chances of peace talks. But it could also make it easier, as both sides would give in to their authority, and then create a unified government, where elections will take place in six months, and then a new Yemen in formed," Masmari said.

As the rally was under way on Saturday, three air strikes targeted the presidential compound in Sanaa without causing casualties, residents told Reuters.

Further north, rockets launched over the border from Yemen killed one person and injured five others in the southern Saudi Arabian city of Najran, Saudi state television reported.

Houthi-run Al-Masirah television said the rockets had targeted a Saudi air force base.

Fighting also escalated on Saturday for control of Yemen's central bank, as President Hadi made plans to relocate the institution outside Sanaa, and appoint a new board of directors, sources in his government told Reuters.

The central bank's governor dismissed the reports of new board appointments as "groundless" in an emailed statement.

A spokesman for Hadi's government could not immediately be reached for comment.

The central bank has been considered the last bastion of the impoverished country's financial system, paying salaries to state employees on both sides of the front lines and guaranteeing food imports.