UNITED NATIONS: The United Nations on Thursday warned of "potentially catastrophic ramifications" in Yemen from competing monetary authorities and a threat by the government to cut off banks in Houthi-controlled areas from the international banking system.

Yemen has been mired in conflict since Iran-aligned Houthis ousted the government from the capital Sanaa in 2014. A Saudi Arabia-led military coalition intervened in 2015, aiming to restore the government, which now operates from Aden.

U.N. aid operations director Edem Wosornu said the government and the Houthis have issued "competing and increasingly stringent directives" that ban individuals, businesses, and local and international financial institutions from dealing with banks in rival areas.

"This includes a potentially imminent decision to exclude banks based in Sanaa from using the SWIFT banking system, which would prevent these banks from facilitating international financial transactions," she told the U.N. Security Council.

"These developments have potentially catastrophic ramifications," Wosornu said. "They threaten to further fragment and weaken Yemen's already struggling economy."

The United Nations says more than half Yemen's population - some 18 million people - need humanitarian help. It has said more than 2 million children could face acute malnutrition and recently warned about a rapidly worsening cholera outbreak.

Wosornu said the volatile banking environment also had serious repercussions for humanitarian operations.

"If banks in Sanaa and other areas controlled by the Houthi de facto authorities are cut off from international financial institutions and networks, we will lose the ability to transfer the funds required to sustain humanitarian lifesaving operations," she told the 15-member Security Council.

Wosornu and U.N. Yemen mediator Hans Grundberg also called for the release of 13 U.N. personnel, five staff members of international aid groups and many more from national aid groups and civil society who were detained by the Houthis last week.

"They remain in incommunicado detention," Grundberg told the Security Council, adding that four U.N. staff detained in 2021 and 2023 were also still being held incommunicado.

Forty countries on Thursday condemned the move by the Houthis and demanded the release of all those detained. (Reporting by Michelle Nichols; Editing by Hugh Lawson)