DUBAI (Reuters) - Forces loyal to former Yemeni President Ali Abdullah Saleh battled their former Houthi allies on Thursday over control of a key outpost, marking the first such battle between the two sides since the veteran leader was killed last year.

The fighting underlined the growing complexity of the conflict that has already killed more than 10,000 people and displaced more than 3 million in the impoverished country.

Sources in the pro-Saleh forces there said there were casualties on both sides in the fighting. The forces included a new unit set up by Saleh’s nephew, Brigadier-General Tareq Mohammed Saleh. He had led a brigade of a Yemeni army unit before his uncle was forced to step down in 2012 following mass protests against his rule.

The fighting followed a major switch in allegiances in the war. Saleh initially sided with the Iranian-allied Houthis who swept across most of northern Yemen in a series of military offensives that began in 2014.

The Houthis forced Saleh’s successor President Abd-Rabbu Mansour Hadi into exile, took the capital Sanaa and continued their advances until they were checked by a coalition of forces from mostly Gulf countries, led by Saudi Arabia.

The switch in allegiances came when Houthis fighters killed Saleh in December after he called on the Saudi-led coalition to end the war, a move interpreted by the Houthis as betrayal.

The new force led by Saleh’s nephew is now expected to bolster Hadi’s supporters.

Thursday’s fighting was concentrated east of the Red Sea port of al-Mokha, at an intersection on the main road leading east into Taiz, Yemen’s third largest city, and the road north to the port of Hodeidah, where most of the country’s food imports enter. Sources said on Thursday that thousands of soldiers comprising former members of the elite Republican Guards, the paramilitary Central Security Forces and other elite troops, backed by Saudi-led coalition forces, were involved in the fighting.Internal clashes and a Saudi-led blockade, which has eased after international criticism, has led to a stalemate in the country and a human catastrophe.