SANAA (AFP) - Yemeni President Abdrabuh Mansur Hadi and the country's powerful Shi'ite militia agreed Wednesday to end a deadly confrontation that had raised fears the impoverished but strategic country might descend into chaos.

The militia, known as Huthis, seized almost full control of the capital Sanaa in September and have fought pitched battles with government forces this week as they continued to press for more political power.

The unrest has raised deep international concern, with the UN Security Council condemning the attacks and backing Hadi as Yemen's "legitimate authority".

Under a nine-point deal, the militia agreed to withdraw from government buildings they seized this week in return for concessions over a disputed draft constitution, state news agency Saba said.

The Huthis pledged to vacate the presidential palace, a day after seizing it, and to free Hadi's chief of staff, who was abducted Saturday.

In return, it would now be "possible to amend" the draft constitution dividing Yemen into six federal regions, which the Huthis opposed, said Saba.

"The draft constitution should be agreed upon by all factions," according to the deal, and Yemen "will be a federal state in accordance with the outcome of the national dialogue."

The agreement also pledges to treat Huthis, known officially as Ansarullah, and other disgruntled factions equally in the allocation of public posts.

"Ansarullah and peaceful Southern Movement and all other political factions deprived of equal representation in state institutions will have the right to be appointed in these institutions," it said.

On Tuesday, the militia seized Hadi's offices at the presidential palace and attacked his residence, in what officials said was an attempted coup.

There were no signs of violence Wednesday, after at least 35 people were killed and 94 wounded in the two previous days.

The violence prompted the Sunni-dominated Gulf Cooperation Council to accuse the Huthis of an attempted "coup".

ENVOY DUE FOR TALKS

The agreement came as UN special envoy Jamal Benomar travelled to the region in a bid to defuse the mounting crisis.

The escalation has raised fears of a collapse of Hadi's government, a key ally in America's fight against Al-Qaeda, and of the country descending into chaos.

The United States said it was closely monitoring the crisis after officials revealed a US diplomatic vehicle had been attacked.

President Barack Obama "is being updated by his national security team," on the unrest, a senior administration official told AFP.

"We strongly condemn the violence and those stoking it in an effort to disrupt Yemen's political transition," the official said.

Defence officials said the US military was ready to evacuate American diplomats and other personnel from Yemen, but the State Department has so far not ordered the embassy to close.

The rising unrest has fuelled longtime divisions in Yemen, where the government, Huthis, southern separatists, powerful Sunni tribes and the local Al-Qaeda branch are all vying for influence.

The Huthis raised the stakes Saturday by kidnapping Hadi chief of staff Ahmed Awad Mubarak in an apparent bid to extract changes to the draft constitution.

Mubarak is leading efforts to reform how Yemen is governed under a "national dialogue" set up after longtime president Ali Abdullah Saleh was forced from power in 2012 following a year of bloody protests.

Ibrahim Sharquieh, conflict resolution expert at the Brookings Institute in Doha, said the Huthis wanted "to rule but not govern" Yemen.

"They want to leave Hadi as president but they want him and the government to be fully cooperative with them," he added.

EX-STRONGMAN URGES ELECTION

Saleh's party released a letter Wednesday it said the former leader sent to Hadi last month urging him to "hold early presidential and parliamentary elections to resolve the country's crisis".

Saleh has been accused of backing the Huthis, who are from the same Zaidi sect of Shi'ite Islam as the ex-leader, as has Shi'ite-dominated Iran.

Heavy fighting erupted Monday around the presidential palace and in other parts of Sanaa, with the Huthis seizing a key army base, taking control of state media and firing on a convoy carrying the prime minister, before a ceasefire was agreed.

Clashes resumed late Tuesday, with the militiamen seizing the palace and allegedly looting its arms depots and attacking Hadi's residence elsewhere in the capital.

Meanwhile, Yemen's second city Aden shut its airport, seaport and entrances to the city due to "dangerous developments in the capital" and "attacks on the symbol of national sovereignty and constitutional legitimacy".

Since they seized Sanaa, the Huthis have pressed their advance south of the capital, where they have met stiff resistance from Sunnis, including Al-Qaeda loyalists.

Yemen's branch of the terrorist network, Al-Qaeda in the Arabian Peninsula, is considered its most dangerous and claimed responsibility for this month's deadly attack on French satirical weekly Charlie Hebdo.