Yemen is close to reaching a deal with northern Shi'ite fighters, a government official said on Wednesday, aiming to end a war that has raged on and off since 2004 and drawn in neighbouring Saudi Arabia.

The government and fighters have been exchanging proposals in recent days to settle the conflict, one of three that the government is fighting on its territory, and Sanaa was waiting for a final agreement from fighter leader Abdul-Malik al-Houthi.

"A deal is expected to be finalised soon with the Houthis to end the war," the official told Reuters.

Yemen said last week it had handed the rebels from the Shi'ite minority a timetable for implementing the government's ceasefire terms.

Saudi Arabia, the world's largest oil exporter, was drawn into the conflict in November when the fighters seized some of the kingdom's territory, complaining that Riyadh was letting Yemeni troops use its territory for attacks against them.

Riyadh declared victory over the rebels last month after they offered a separate truce, and said they had withdrawn from Saudi territory. But the fighters say Saudi airstrikes have continued.

A mediator signalled on Tuesday possible progress in efforts towards a truce between Yemeni government forces and the rebels, who complain of social, religious and economic discrimination.

Al Jazeera television quoted the unnamed mediator as saying Sanaa had agreed on rebel representatives joining committees to oversee the implementation of a ceasefire.

Qatar brokered a short-lived ceasefire between the government and rebels in 2007 and a peace deal in 2008, but clashes soon broke out again. Yemeni President Ali Abdullah Saleh unilaterally declared the war again in July 2008 and full-scale fighting resumed a year later.

Reuters