DUBAI (REUTERS) - Yemeni President Abdrabuh Mansur Hadi resigned on Thursday, a government spokesman said, throwing the country deeper into chaos days after Huthi rebels battled their way into his presidential palace.

Hadi, an ally of the United States, stood down abruptly shortly after Prime Minister Khaled Baha had offered his government's resignation, saying it did not want to be dragged into "an unconstructive political maze".

This was an apparent reference to a stand-off between Hadi and the Shi'ite Muslim Huthi movement which has been holding the President a virtual prisoner in his own official residence.

"We apologise to you personally and to the honourable chamber and to the Yemeni people after we reached a dead end," a government spokesman quoted Hadi's resignation letter as saying.

It was addressed to the speaker of parliament, who becomes interim head of state under the constitution.

Hadi's decision marked an abrupt turnaround from Wednesday, when he said he was ready to accept Huthi demands for a bigger stake in constitutional and political arrangements.

That announcement had appeared to ease worsening differences between him and the Huthis, whose rise to power has placed Yemen within a wider sectarian struggle fought by proxies of Riyadh and Teheran in parts of the Middle East.

The Huthis' defeat of the presidential guards had already added to disarray in a country where the United States is also carrying out drone strikes against one of the most powerful branches of Al-Qaeda.

REGIONAL STRUGGLE

The rebels' rise has resulted in a shift in Yemen's complex tribal, religious and regional allegiances.

Suspecting Iranian complicity, the Sunni Muslim authorities in Riyadh cut most of their financial aid to Yemen after the Huthis' takeover of the capital.

On Thursday, the capital Sanaa remained largely shut down, witnesses said, even though the airport and seaport in the southern city of Aden resumed work on Thursday, having closed for a day in protest at the Huthi offensive against Hadi's administration.

In central Yemen, local tribesmen said they were pushing back Huthi fighters in Marib province, which produces half of Yemen's oil and more than half of its electricity.

The local branch of Al-Qaeda has responded to the Huthis' ascent by attacking their forces, as well as state, military and intelligence targets.

As Zaidis, a Shi'ite Muslim sect, the Huthis oppose the hardline Sunni Islamists of Al-Qaeda.

However, the Huthis' assaults on the militants risk raising sectarian feelings in predominantly Sunni Yemen.

Before Hadi quit, clusters of Huthi fighters were dotted around the perimeter of the presidential palace on Thursday.

At Hadi's residence, sentry points normally used by presidential guards were empty, and a group of Huthis with an army vehicle were parked at a main entrance.