SANAA (Reuters) - At least 17 civilians were killed in Yemen’s southwestern province of Taiz on Saturday by a Saudi-led coalition air strike that struck a house, local officials and residents said.

The raid targeted a house in the al-Salw district, the sources said, an area of Taiz where Houthi rebels and government forces backed by the coalition are fighting for control. Taiz is Yemen’s third largest city with an estimated pre-war population of 300,000.

The Saudi-led coalition has been fighting Houthi rebels and forces loyal to former president Ali Abdullah Saleh, who hold much of the north of Yemen including the capital Sanaa, since March 2015 to try to restore the internationally recognized President Abd-Rabbu Mansour Hadi to power.

The exiled Hadi on Saturday rejected a U.N. peace proposal to end the turmoil saying the deal would only be a path to more war and destruction.

Speaking after meeting U.N. envoy Ismail Ould Cheickh Ahmed in Riyadh, Hadi said the agreement would “reward the rebels and penalize the Yemeni people and legitimacy,” according to the government-controlled Saba news agency.

According to a copy of the proposal seen by Reuters, the plan would sideline Hadi and set up a government of less divisive figures.

The deal would involve removing Hadi’s powerful vice president, Ali Mushin al-Ahmar Ahmar from power and Hadi agreeing to become little more than a figurehead after a Houthi withdrawal from the capital Sanaa.

Hadi fled the armed advance of the Iranian-allied Houthi movement in March 2015 and has been a guest of neighboring Saudi Arabia ever since.

A U.N. Security Council resolution a month later recognized him as the legitimate head of state and called on the Houthis to disarm and quit Yemen’s main cities. But the Houthis and their allies in Yemen’s army have said he will never return.

The conflict in Yemen has killed at least 10,000 people and unleashed one of the world’s worst humanitarian crises.