GENEVA (Reuters) - The formation of a new government by Yemen’s armed Houthi movement and its political allies will hinder peace efforts in the country, the U.N. special envoy to Yemen said on Tuesday.

United Nations envoy for Yemen, Ismail Ould Cheikh Ahmed speaks to reporters upon his departure at Sanaa airport following a visit to Sanaa, Yemen November 7, 2016. REUTERS/Khaled Abdullah

The move, reported by the Houthi-run state news agency on Monday, has been seen as a blow to U.N.-backed efforts to end 20 months of war in Yemen.

“The announcement by (the Houthi) Ansar Allah and the General People’s Congress on the formation of a new government in Sana’a represents a new and concerning obstacle to the peace process and does not serve the interests of the people of Yemen in these difficult times,” Ismail Ould Cheikh Ahmed said in a statement.

The unilateral declaration contradicted recent comments by the Houthis to the U.N. and to U.S. Secretary of State John Kerry, and only complicated the search for a peace deal, which needed to be based on U.N. talks, Ould Cheikh Ahmed said.

“There is still a chance to pull Yemen back from the brink,” he said, adding that all parties to the conflict should recommit to a cessation of hostilities, including a complete halt to ground and air military activities.

The formation of the new government was also condemned by the Gulf Cooperation Council, whose member Saudi Arabia is leading a coalition backing Abd-Rabbu Mansour Hadi, the internationally recognised president.

The coalition has carried out thousands of air strikes on the Houthis but failed to dislodge them from the capital Sanaa.

“The step of forming a government indicates the enormous importance of reinforcing our domestic position and serving the people, despite the difficult economic situation,” the Houthi group’s leader, Abdul-Malik al-Houthi, said in a statement carried on the website of a Houthi-controlled news channel.

Diplomats had hoped the Houthis, who control Sanaa, would hold off on putting together a cabinet of their loyalists and instead form a unity government with their Yemeni foes, whom they pushed into Saudi exile.

The Houthis, who control territory with more than half of Yemen’s population, previously said forming a government with their allies did not mean abandoning the U.N.-sponsored peace process.