A humanitarian ceasefire for Yemen is expected to be announced within 24 hours, the news agency of the dominant, Iranian-allied Houthi group quoted the UN special envoy to the country as saying.

The report by the Saba news agency emerged as envoy Ismail Ould Cheikh Ahmed left the capital Sanaa after meeting Houthi officials. The talks were part of intensive efforts to broker a ceasefire to halt more than three months of fighting and Saudi-led air strikes that have killed more than 3,000 people.

"We have come up with some 'cautious optimism' after our third visit to Sanaa," Saba news agency quoted Ould Cheikh Ahmed as saying. "There are some points that can move us forward and within the coming 24 hours. We will announce the humanitarian truce," he added, according to Saba in Arabic.

Ould Cheikh Ahmed said that some consultations were still being held by the office of the UN Secretary-General, Ban Ki-moon, between Riyadh and Sanaa and that the optimism for  reach a humanitarian ceasefire was high, according to Saba.

Relief agencies say the fighting and a near-blockade imposed by an alliance of Arab states, aimed at stopping weapons deliveries to the Houthis, have caused a humanitarian disaster in Yemen, with over 80 per cent of its 25 million people now needing some form of emergency aid.

Ould Cheikh Ahmed had earlier held talks with exiled Yemeni President Abd-Rabbu Mansour Hadi in the Saudi capital Riyadh on a truce that would last until after the Eid Al Fitr holiday, which is expected to start on July 17.

News of a possible humanitarian truce has helped lift the Saudi stock market. The index closed 2.5 per cent higher.

Hadi's government told the United Nations on Wednesday it would agree to a humanitarian truce provided key guarantees were met, government spokesman Rajeh Badi told Reuters by phone.

These included a release of prisoners, including the defence minister, by the Houthis, and their withdrawal from four southern and eastern provinces where they are fighting local militias.

Saudi Arabia and an Arab coalition have been bombing the  Houthis and their allies in Yemen's army in an effort to restore Hadi and bolster armed opponents of the Houthis.

There was no immediate comment from the Houthi movement, which views its takeover of Sanaa last September, and of much of the Arabian Peninsula country since, as a revolution against a corrupt government backed by the West.

The group has previously welcomed any ceasefire.

The Houthis have yet to accept a UN Security Council Resolution passed in April which recognises Hadi as the legitimate president and calls on them to quit seized land.-Reuters