Yemen's Houthi rebels have reportedly demanded $51 billion from Saudi Arabia and official recognition as the country's rulers in exchange for ending the war.
The demand came after Saudi Arabia approached the Iran-backed group to explore a negotiated end to hostilities, according to a report by The Wall Street Journal. The outreach followed Houthi attacks on Saudi oil tankers in the Red Sea and the seizure of territory overlooking the strategic Bab al-Mandeb chokepoint.
People briefed on the discussions told the WSJ that the Houthis sought $51 billion to compensate for years of Saudi airstrikes and a prolonged blockade. While other figures have since been discussed, the group's message remained that any settlement would cost tens of billions of dollars.
It also wanted Riyadh to recognise it as Yemen's legitimate rulers, effectively accepting an Iranian-armed adversary on its southern border.
The demands come as fighting has intensified again this summer, with Houthi attacks on Saudi oil facilities and airports, alongside a fresh offensive to capture strategic territory in Yemen.
{{/usCountry}}The demands come as fighting has intensified again this summer, with Houthi attacks on Saudi oil facilities and airports, alongside a fresh offensive to capture strategic territory in Yemen.
{{/usCountry}}Also Read: Indian injured in attack on Saudi airport dies, total West Asia toll now 24
The Houthis are also advancing towards Aden, the port city that serves as the seat of Yemen's internationally recognised, Saudi-backed government. The rebels have moved to within around 50 miles of the city, their closest position since seizing parts of it in 2015.
On October 31, the Iran-backed group targeted the presidential palace in Aden with two missiles, a police official told AFP. The city has faced repeated attacks since Yemen's dormant civil war reignited in July.
Meanwhile, the Houthis stepped up attacks on Saudi Arabia in October, carrying out strikes almost daily, with a sharp increase towards the end of the month.
'Saudi Arabia faces greater risks now'
Saudi Arabia has responded with repeated airstrikes, but Crown Prince Mohammed bin Salman is reluctant to negotiate without securing gains on the ground that could give the kingdom leverage, Saudi officials told the WSJ.
The crown prince, who runs the kingdom under his 90-year-old father, King Salman, is also concerned that deploying more troops to Yemen could result in heavy casualties and trigger public anger at home.
Saudi authorities have not publicly reported dozens of casualties already suffered by their forces.
The Houthis have also targeted locations in Yemen that could serve as assembly points or command centres for a Saudi-led ground offensive. One such strike in Shabwah governorate killed at least 75 people and injured more than 200, making it the deadliest since the civil war reignited.
Also Read: How the Houthis built their war machine
Kristian Coates Ulrichsen, an expert at Rice University's Baker Institute, said Saudi Arabia faces greater risks now than during the earlier phase of the conflict between 2015 and 2022. Strikes on civilian and energy infrastructure have also undermined investor confidence.
The Houthis' financial demand could create a precedent for further pressure on Saudi Arabia, said Maged Al-Madhaji, a Yemeni analyst and co-founder of the Sana'a Center for Strategic Studies, the WSJ report added.
“The bigger problem is establishing a precedent whereby the group can escalate militarily whenever it wants additional concessions or money,” he said.
Lack of military support from its allies
Saudi Arabia is also struggling to secure military support from its allies. The United Arab Emirates, once a key partner in the anti-Houthi campaign, withdrew in December last year following disagreements with Riyadh.
Abu Dhabi backs forces seeking an independent South Yemen, which conflicts with Saudi Arabia's objective of keeping Yemen united.
Riyadh has since sought support through its Mecca Pact with Turkey and Pakistan, which commits members to treating an attack on one as an attack on all. However, Turkey's Parliament has yet to approve the agreement, while Pakistan has refused to participate in strikes inside Yemen.
Egypt's Parliament approved military support for Saudi Arabia in October, but President Abdel Fattah Al Sisi has said any deployment would be defensive. The US has also declined to provide direct support against the Houthis following its weeks-long military campaign against the group in 2025.
(With inputs from WSJ and AFP)