SANAA (AFP) - Shi'ite leader Abdel Malek al-Huthi on Saturday defended his powerful militia's establishment of transitional bodies to resolve Yemen's political crisis, in the face of street protests and international criticism.

"This historic and responsible initiative is in the interest of the country... because it fills a political vacuum," Huthi said in a televised address to his supporters gathered in a northern Sanaa stadium.

He said it was "in the interest of all Yemenis without exception", including the separatists of southern Yemen.

The formation of a "presidential council", announced on Friday, would also head off the threat from Al-Qaeda which has a strong presence in east and south Yemen, Huthi said.

"If Al-Qaeda takes control of the country, it will plot against our brothers in Saudi Arabia and the Gulf," he warned.

However, Yemen's Gulf neighbours have condemned the moves by the Shi'ite militia, named Huthis after their leadership, saying they "totally undermine" international and regional efforts to help resolve the impoverished country's crisis.

"The Huthi coup marks a grave and unacceptable escalation... and endangers the security, stability, sovereignty and territorial integrity of Yemen," said the Saudi-led Gulf Cooperation Council (GCC).

The six Sunni monarchies said their own security was linked to that of their neighbour Yemen, and vowed to take "all the necessary measures to defend their interests", without elaborating.

The Shi'ite militia overran Sanaa in September and seized the presidential palace and key government buildings last month, prompting Western-backed President Abedrabbo Mansour Hadi and Prime Minister Khalid Bahah to tender their resignations.

In an announcement on Saturday, the Huthis said Hadi's defence minister, General Mahmud al-Subaihi, would chair a newly formed "security commission", which also included the outgoing interior minister.

The commission's task would be to "lead the country's affairs until the establishment of a presidential council".

BLAST, DEMOS

The announcement was followed by a blast outside the Huthi-controlled presidential palace, and protests by thousands of people on the streets of Yemeni cities, witnesses said.

Gunmen loyal to the Shi'ite militia fired into the air to disperse demonstrators in Sanaa and detained 17 of them in a second successive day of anti-Huthi protests.

A US official at a security conference in Munich said Washington and its GCC allies "don't agree" with the Huthis' transition plans.

And UN Security Council president Liu Jieyi said its 15 members were ready to "take further steps" if UN-brokered negotiations to resolve Yemen's political crisis were not resumed "immediately".

Turkey's foreign ministry was also critical, urging the Huthis "to act with common sense, restraint and responsibility at this critical stage in upholding the salvation of the country".

On the home front in the mainly Sunni country, influential tribal leaders in the oil-rich eastern province of Marib said they "rejected the authors of this coup".

The Sunni Islamist party Al-Islah, a major player in Yemeni politics, rejected the "unilateral" Huthi initiative and called for it to be scrapped in favour of a return to political dialogue.

Even the General People's Congress of ousted president Ali Abdullah Saleh, who has become an ally of the Shi'ites, said the moves were unconstitutional and called for dialogue.

On Friday, the Huthis said they would set up a national council of 551 members to replace parliament in the violence-wracked country, a key US ally in the fight against Al-Qaeda.

The five-member "presidential council" would form a transitional government to run Yemen for two years, they announced.

The declaration came after a Wednesday deadline set by the militia for political parties to resolve Yemen's crisis passed with no agreement, and also called for the formation of a "revolutionary council".

UN envoy Jamal Benomar, who has been striving to seek a negotiated solution, was back in Sanaa on Saturday and expected to meet members of the council and political leaders, the Huthi-controlled state new agency Saba reported.

Friday's declaration by the Huthis described Mohammad Ali al-Huthi as "president of the revolutionary council".

Yemen, which is also fighting an Al-Qaeda insurgency, has been riven by instability since the Arab Spring-inspired uprising that forced autocratic president Saleh from power in 2012.