An explosion in Yemen's Red Sea port of Hodaida has killed 25 workers at a dairy factory, medical sources have said, in what appears to be one of the biggest cases of civilian deaths since the Saudi-led campaign against Houthi rebels.

Residents near the factory said it was located near an army camp loyal to former president Ali Abdullah Saleh, while medical sources in the city said the casualties had all been workers at the plant.

Fighter plane from the Saudi-led coalition had targeted rebel-controlled army camps in Hodeida and anti-aircraft guns there returned fire. During the firefight, missiles hit the factory.

The blast late on Tuesday night also destroyed a fuel store, residents told the Reuters news agency.

A military spokesman for the Saudi-led coalition blamed Shia Houthi fighters for the explosion.

The spokesman said on Wednesday that information from the ground proved the factory was hit by Katusha rockets belonging to the Houthis.

"We know that the Houthi fighters are manipulating through their media outlets in order to incite the Yemeni people," he said.

"We know that the Yemeni people are fully aware that this operation is only meant to restore the sovereignty that was hijacked by the Houthis."

Saudi Arabia and other Sunni Muslim, who want to put President Abd-Rabbu Mansour Hadi back in control of the country, began the operation a week ago to stop Houthi fighters, supported by former president Ali Abdullah Saleh, who had already taken the capital and threatened Aden.

Fighting continues

The sound of gunfire and several large blasts were heard in Aden throughout Tuesday night, Reuters reported.

Videos posted online, which could not be immediately confirmed, appeared to show fighting at an army base loyal to Saleh in the northeast of the city.

A raid at a coastal defence station at Maidi port in Hajja province north of Hodaida killed six soldiers, workers there said, while further strikes hit an army camp in Sanaa and a government facility in Saadeh in the north of Yemen.

In New York, the UN said late on Tuesday that at least 62 children had been killed and 30 wounded in fighting over the past week, and that an attack on a refugee camp in northern Yemen, which medics blamed on an air strike, broke international law.

UN High Commissioner for Human Rights Zeid Ra'ad Al Hussein warned the country was "on the verge of total collapse".