Yemen's Shia Houthi rebels have announced a new presidential council in a "constitutional declaration," a move that could signal their formal takeover of the country's government.
The United Nations said that it would not acknowledge the announcement made on Friday afternoon, calling it a unilateral decision.
The Houthi rebels moved into the capital, Sanaa, from their northern stronghold of Saada in September last year seeking a broader political partnership in running the country.
They seized the presidential palace and key government buildings on January 22, prompting President Abd Rabbu Mansour Hadi and his prime minister to tender their resignations.
Hadi and his cabinet are being held under house arrest by the rebels - who gave a Wednesday deadline for Yemen's political parties to negotiate an acceptable way forward or else they would begin acting unilaterally.
Under Yemeni law, only the president can issue constitutional declarations.
UN envoy leaves to Saudi
The Houthis, who are believed to be backed by Iran, called on their supporters to take to the streets for evening celebrations, which are expected to follow the declaration. They also deployed armed men and pick-up trucks with anti-aircraft guns on main streets and around key institutions.
The development comes after days of failed talks sponsored by UN envoy to Yemen, Jamal Benomar.
Benomar reportedly left Yemen for Saudi Arabia for talks on Friday.
According to senior politicians who attended the talks, the Houthis insisted on the formation of a presidential council with representatives from northern and southern Yemen.
Yemeni parties demanded assurances that the formation of the council will go hand-in-hand with a withdrawal of Houthi forces from key institutions and the release of Hadi and Cabinet members from house arrest.
Other parties in the talks wanted the parliament convene and possibly announce early elections, which the Houthis opposed, claiming the parliament had no legitimacy and that its mandate had expired.
Mohammed al-Sabri, a top politician from a multi-party alliance called the Joint Meeting Parties, described the Houthis' actions as a "coup," predicting it would lead to "international and regional isolation of Yemen".
Last year, the UN Security Council placed two Houthi leaders and deposed President Ali Abdullah Saleh, also believed to be a main backer of the Houthis, on a sanctions list for their role in derailing Yemen's transition.