UN chief Ban Ki-moon has called for an immediate ceasefire in Yemen and begun the hunt for a new peace envoy to the war-torn country, where Al-Qaeda is expanding its territory.

Ban's plea follows more than three weeks of air strikes by a Saudi-led coalition aimed at driving back Iran-backed rebels whose sweeping advance forced President Abedrabbo Mansour Hadi to flee to Riyadh.

Yemen "is in flames," Ban told the press in Washington on Thursday. "I am calling for an immediate ceasefire in Yemen by all parties."

His remarks followed the resignation of his envoy to Yemen, Jamal Benomar, a Moroccan-born career diplomat who lost the confidence of Saudi Arabia and its allies. They accused him of being duped by the rebels.

Saudi Arabia's regional rival, Iran, renewed its calls for dialogue on Friday and said its foreign minister had spoken to the UN chief overnight.

Ban said he was in the process of finding a new envoy "who can be immediately deployed" to seek a political solution.

"The Saudis have assured me that they understand there must be a political process," he said.

"I call on all Yemenis to participate, and in good faith."

Benomar had been instrumental in negotiating a deal that eased president Ali Abdullah Saleh from office in February 2012 after a year of bloody protests against his three-decade rule.

Renegade army units loyal to Saleh allied with the Huthi rebels, providing vital support as they advanced out of their bastion in the northern mountains near the Saudi border into mainly Sunni areas.

On Tuesday, the UN Security Council imposed an arms embargo on the Huthi rebels and demanded they give up seized territory.

The Yemen conflict has sent tensions soaring between Saudi Arabia and Iran -- the foremost Sunni and Shiite Muslim powers in the Middle East.

Tehran is a key ally of the Huthis but vehemently denies arming them.

Yemen has sunk further into chaos since the start of the air raids the majority of which, according to Western diplomats, have been carried out by Saudi Arabia itself.


'Same boat'

Iraqi Prime Minister Haider al-Abadi, a Shiite who has offered a rare voice of opposition to the campaign among Arab leaders, called Thursday for a political solution to quickly end the conflict.

"We are on the same boat in the region. If anybody makes a hole in that boat, we all will sink," he said, speaking at a Washington think-tank.

"In our own belief we think an end to this war of Yemen must be very soon and the only way forward is a political solution by Yemenis themselves."

Yemen is a front line in the US war on Al-Qaeda, which has exploited the growing turmoil to expand its control of areas in the southeast of the deeply tribal Arabian Peninsula country.

For years, Yemen was a key US ally in the fight against Al-Qaeda, allowing Washington to carry out drone attacks on its territory.

But the government's collapse forced the United States to close its embassy and withdraw special operations forces from Al-Anad air base from where they had been helping Yemen battle the jihadists.

Washington has vowed that it will carry on its campaign regardless and two suspected Al-Qaeda militants were killed in an apparent US drone strike in Shabwa province in the south overnight, a tribal source said.

Saudi-led air strikes meanwhile killed at least 20 rebels and destroyed two tanks and four armoured vehicles in a convoy headed out of Al-Anad, a provincial official said.

In the central city of Taez, at least 16 people were killed as pro-Hadi soldiers put up fierce resistance to a rebel attack on their camp.

Three civilians were among the dead when a stray shell hit their home, a military source and residents said.

The World Health Organization says at least 736 people died in the conflict up to April 12 and more than 2,700 were wounded. The majority have been civilians.

The United Nations launched an urgent appeal for $274 million (253 million euros) to provide emergency assistance for what was already the region's poorest country.

"Ordinary families are struggling to access health care, water, food and fuel -- basic requirements for their survival," UN Humanitarian Coordinator Johannes Van Der Klaauw said.