UN secretary-general Ban Ki-moon has appealed to the Security Council for action to halt Yemen's slide toward anarchy, warning the country was "collapsing before our eyes".

The UN chief was reporting to the 15-member council following his visit to Saudi Arabia and the United Arab Emirates for talks that he said focused on "preventing civil war in Yemen."

"Let me be clear, Yemen is collapsing before our eyes. We cannot stand by and watch," Mr Ban told the council.

"We must do everything possible to help Yemen step back from the brink and get the political process back on track."

He called for president Abedrabbo Mansour Hadi and his prime minister to be "granted freedom of movement" following the power grab by the Shiite militia known as the Houthis, which has left them under de facto house arrest.

At the weekend, Mr Ban called for Hadi to be fully restored as president, following talks with King Salman in Saudi Arabia, which has described the Houthi power grab as a coup.

Yemen, a key US ally in the fight against Al-Qaeda, has been in turmoil since the Houthis seized the capital Sanaa in September and ousted the government last week.

UN special envoy Jamal Benomar warned that Yemen was "at a crossroad".

"Either the country will descend into civil war and disintegration, or the country will find a way to put the transition back on track," Mr Benomar told the council by video link from Sanaa.

Mr Benomar has been leading UN efforts to broker a deal that would push the Houthis to step back from their power grab and restore some measure of stability in the impoverished Arab country.

The instability is creating conditions for Al-Qaeda in the Arabian Peninsula (AQAP) to expand its foothold to other parts of the country after AQAP fighters seized control of a camp on Thursday, Mr Benomar said.

Qatar's UN Ambassador Sheikha Alya Bint Ahmed Bin Saif Al Thani, speaking for the Gulf Cooperation Council, a six-nation bloc comprising energy-rich Gulf states, urged the Security Council to take action.

"It is a coup against the legitimate government in Yemen," she said.

"We should bring pressure to bear on the Houthi to stop using force and to withdraw from all governmental institutions."

Britain, Jordan to prepare resolution working towards resolution

Houthi fighters ride a patrol truck in the Yemeni capital, Sanaa. ( Reuters: Khaled Abdullah )

Following behind-closed door consultations, Britain said it would be working with Jordan on a resolution that would outline the Security Council's stance on Yemen.

"There was a lot of support for the idea that the council should issue a strong united message," British Ambassador Mark Lyall Grant said.

"We are planning to take that forward with Jordan and will be looking for a resolution in the next few days."

Chinese Ambassador Liu Jieyi, who holds this month's presidency of the council, said a resolution might be the best way "to help with the continuation of the political transition".

UN diplomats raised concern that Russia may be reluctant to take a hard line on the Houthis and demand they withdraw from Sanaa.

The council last week threatened to "take further steps" if negotiations to end the crisis failed, in a veiled reference to possible sanctions.

The United States, Britain and France on Wednesday rushed to close their embassies over security fears, with US staff destroying top-secret documents and sensitive equipment before pulling out.

AFP/Reuters