SANAA (AFP) - Shi'ite rebels on Saturday rejected Yemen's newly formed Cabinet aimed at defusing the country's political crisis, instead demanding a reshuffle to dismiss members they consider unqualified or corrupt.

The rebels who overran Sanaa in September also dismissed UN Security Council sanctions imposed on Friday on ousted president Ali Abdullah Saleh and two senior rebel commanders as a "flagrant provocation" to Yemenis.

The Cabinet, formed on Friday and welcomed by Washington, "is in violation of the peace agreement... and a clear obstruction to the political process in favour of private and narrow interests," the rebels said in a statement.

The rebels, also known as Ansarullah, said the Cabinet should be reshuffled to "remove those not meeting the criteria" spelled out in the peace agreement signed on Sept 21, when the rebels seized the capital unopposed.

These criteria include "qualifications, integrity and neutrality in managing the country", the statement said, adding that the reshuffle should remove ministers accused of corruption.

The new government was formed as part of a UN-brokered peace deal under which the Huthis are supposed to withdraw from the capital Sanaa, which they seized control of in September.

On Nov 1, the main parties signed an agreement brokered by UN envoy to Yemen Jamal Benomar for the formation of a government of technocrats.

Under the accord, representatives of the rebels and their rivals, the Sunni Al-Islah (Reform) Islamic party, mandated Hadi to form a government and committed to support it.

In the wake of the new agreement, Benomar warned in an interview with AFP that without the rapid formation of a government, tensions between Shiites and Sunnis were likely to increase, sinking Yemen deeper into crisis.

On Friday, the UN Security Council slapped a US-proposed visa ban and assets freeze on him and two allied Shi'ite rebel commanders for threatening peace in the impoverished country.

The Huthis are widely thought to be backed by Saleh.

Washington said Saleh "was behind the attempts to cause chaos throughout Yemen" by using the Huthis to weaken the government and "create enough instability to stage a coup".

On Friday, Saleh supporters protested alongside rebels to denounce the planned sanctions.