The Trump administration plans to move forward with a dramatic reduction of humanitarian assistance to Yemen in response to restrictions imposed on aid by Iranian-linked Houthi rebels, US officials and relief workers have said.

US officials, who spoke on the condition of anonymity to discuss a decision that has not been announced publicly, say the move, effective from Friday, is intended to prompt the rebels to lift measures in areas of Yemen they control that have made it difficult for aid groups to operate.

But aid officials warn that the cut could prove disastrous ahead of what many fear will be a crippling coronavirus outbreak in a country that is already the scene of the world's worst humanitarian crisis.

“There is no question. We are running out of money,” Lise Grande, the UN humanitarian coordinator for Yemen, said in an email from Sanaa. “Many of the operations which keep people alive will close next month if funding doesn't come very soon. Already health, protection and water programmes are being scaled back.”

The Houthi rebels, who have controlled much of Yemen, are in the fifth year of a punishing conflict with a military coalition led by Saudi Arabia.

The US decision caps weeks of speculation about a possible cutoff for Yemen and behind-the-scenes efforts by UN officials, aid workers and diplomats to pressure the Houthis to loosen rules that have impaired aid delivery and, humanitarian officials say, made it impossible to ensure that assistance isn't diverted for military or other purposes.

While the Houthi government rolled back some of the measures - including a proposed 2 per cent tax on all aid - in response to an international outcry last month, other restrictions, including delays in granting travel permits, remain in place, aid groups say.

Now, the US Agency for International Development (USAID) says it has made the “difficult decision” to cut assistance, with exceptions for certain “lifesaving” aid.

A USAID spokesperson said the reduction would occur in Houthi-controlled areas because the rebels had “failed to demonstrate sufficient progress towards ending unacceptable interference” in aid operations.

“We continue to demand that all assistance be provided in accordance with humanitarian principles to ensure it is reaching those who need it most,” he said.

The spokesperson said operations would be evaluated as the Covid-19 situation evolves. USAID did not specify what share of American aid would be cut. Last year, the United States provided more than $740m (£606m) for humanitarian operations in Yemen, a fifth of all humanitarian funding for the country, aid officials said.

“Everybody's ripped up about this. This goes against the grain of people's emotions,” a US official said. “While the stakes are very high and we definitely don't want to cut off lifesaving assistance, the pressure needs to continue until they fall in line.”

Officials who have been in discussions with USAID say the exceptions are expected to permit only scant amounts of aid to continue, including inpatient treatment for malnutrition and medical care related to a major cholera outbreak.

If confirmed, that would mean much of the support to the country's battered health sector would end. Also affected would be assistance to camps where people displaced by fighting live in crowded conditions; support to water and sanitation networks; and education about health and hygiene, which is seen as particularly critical at this time.

Though no confirmed Covid-19 cases have been reported in Yemen, the country has limited testing capacity and a health system severely degraded by poverty and war.

“The thing that's pretty amazing, not in a good way, is that as Covid has become a pandemic and humanitarian organisations brace for an urgent ramp-up to stop its spread, the suspension is proceeding like we're doing business as usual,” said Scott Paul, humanitarian policy lead for Oxfam America. His organisation is calling for a delay of at least a month in implementing any aid reduction.

Aid officials say large US cuts could mean that more than 5 million people could go without emergency health service; millions could go without food. Already this week, the UN World Food Program said it would reduce food rations by half because of funding shortfalls and Houthi restrictions.

In a letter to Mike Pompeo, the secretary of state, and USAID Administrator Mark Green, four Democratic members of congress called the Houthi restrictions unacceptable but urged the administration to hold off on a large scale reduction in aid.

“Given the US is among the largest humanitarian donors to Yemen, abruptly ceasing aid would exacerbate an already tragic humanitarian crisis,” the members of congress, including the chair of the House Armed Services Committee and House Foreign Affairs Committee, wrote.

A humanitarian official in Yemen said people already were starving. “Families all across Yemen depend on the generosity of the American people to survive. Now they are being punished and now they will die,” the official said.

Christine Cool, a project coordinator for the UN Office for the Coordination of Humanitarian Affairs, said the World Health Organisation continued to do what it could to help Yemen prepare for a coronavirus outbreak, establishing hotlines, assisting hospitals establish isolation units and facilitating the delivery of supplies.

But the situation is extremely fragile. “An introduction of Covid in Yemen would be catastrophic for the country, given the powder keg of exacerbating factors,” she said.

The US official said the decision was not driven by the Trump administration's “maximum pressure” campaign on Iran, which has included sanctions and measures to crack down on Iranian-backed proxy groups. While the Houthis are not thought to have as close ties to Iran as groups in Iraq, Syria and Lebanon, officials say they have received some military support from Tehran.