Internalising peace: How to build on Saudi-Iranian de-escalation for a settlement in Yemen

Renewed diplomacy between Saudi Arabia and Iran, which broke ties in 2016, has created momentum towards peace in war-torn Yemen. In recent years, both countries have used Yemen as a key theatre to confront one another and played a critical role in feeding the country’s near decade-long internal conflict: Riyadh has undertaken direct military action in support of the internationally recognised government, while Tehran has provided military aid to the Houthi movement – which now controls much of the north of the country. The new regional de-escalation provides a long-overdue opening to move towards a settlement.

For Riyadh, progress on Yemen – and removing the threat of attacks originating in the country – is the litmus test for the success or failure of the restoration of relations with Tehran. Iran, for its part, is seeking pathways in the Middle East to relieve domestic and international pressure related to Western sanctions over its nuclear programme. Reports have now emerged of a commitment from Tehran to halt weapons transfers to the Houthi movement and lean on its leaders to accept a permanent ceasefire with Riyadh.

This breakthrough comes to the backdrop of a countrywide UN-brokered truce in Yemen, which largely holds despite its formal collapse in October 2022. There have also been direct Saudi-Houthi talks, culminating in a recent in-person meeting in Sanaa to negotiate a settlement. This deal would include a full Saudi withdrawal in exchange for a permanent Houthi-Saudi ceasefire, a large-scale prisoner exchange, the reopening of oil exports from Yemen, and a Houthi commitment to rejoin UN-mediated political talks.

The last point will be the hardest to achieve, considering the complex internal dynamics that underpin the conflict. This means a deal between regional powers – while welcome – will not automatically deliver a sustainable settlement for Yemen. Those European states invested in supporting a peace agreement need to ensure that improved relations between Saudi Arabia and Iran are also used to advance inclusive, intra-Yemeni negotiations under UN auspices, rather than merely being the moment when the regional dimension of Yemen’s conflict is resolved at the expense of internal dynamics.

A central concern is that Saudi-Iranian talks will result in the “Astanisation” of the peace process, whereby regional powers seek to shape an outcome over the heads of domestic actors and the United Nations. Although Riyadh continues to support the UN political process, Saudi-Iranian and Saudi-Houthi talks are principally focused on ending Houthi attacks into Saudi Arabia, thereby facilitating the kingdom’s withdrawal from the conflict: the regional as opposed to the internal dimensions. The Houthi desire to sign an agreement with Riyadh and not the officially recognised Yemeni government is testament to this dynamic.

This raises the question of whether the Houthis can play a constructive role in shaping a power-sharing settlement. The situation is further complicated by the fact that, although Iran wields meaningful influence over the Houthis, the movement is far from wholly being an Iranian proxy. Indeed, the Houthis have already stated that they will not be bound by a regional agreement. In this sense, Iran’s relationship with the movement could ultimately become a liability for Tehran’s efforts to normalise relations with Riyadh.

It also remains unclear whether the recent Saudi-Houthi talks in Sanaa could amount to Riyadh implicitly accepting current Houthi territorial control. The Houthis may interpret an agreement with Riyadh as providing them space to regroup for new military incursions aimed at securing control of the oil-rich Marib or Shabwa regions. Satellite images point to Houthi movements around Marib that could indicate a military build-up. Yemeni actors opposing the Houthis will likely react militarily to new advances, sparking new fighting.

At the same time, these southern groups will not accept conditions of Houthi territorial control and political influence negotiated in their absence. But, in this scenario, Saudi Arabia could accept the country’s de facto partition – given the kingdom’s priority of ending its involvement in the conflict. Riyadh will likely then lean on the United Arab Emirates to enforce a southern peace given Abu Dhabi’s interest in securing control of the country’s coasts and waterways. But anti-Houthi groups, some of which are seeking an independent South Yemen, can be expected to leverage these Saudi-Emirati divergences for their own ends, just as they have done throughout the conflict – further preventing the emergence of a unified political front able to coherently negotiate with the Houthis.

These dynamics show that regional détente cannot be a substitute for a comprehensive political process between Yemenis. Europeans are secondary actors in Yemen, but they need to now focus on encouraging intensified intra-Yemeni negotiations by ensuring the UN envoy gets the necessary political and material support to take forward a meaningful political process.

This will require support for an inclusive track that includes the Houthis, southern groups, and representatives from across Yemeni society. More effort is needed to reflect the full spectrum of political views in negotiations, with a particular focus on women’s representation, and overcoming disunity within the anti-Houthi camp.

A key element of this process will be increased international efforts to strengthen the representative nature and unity of the Presidential Leadership Council, the official government’s executive body, which – drawing together anti-Houthi groups – was formed in Riyadh in April 2022. Addressing wider southern disunity, including by unifying competing military factions under a single chain of command, is also a prerequisite to a stabilising pathway. This will be key to enabling more effective negotiations with the Houthis and the movement’s meaningful engagement with the UN-led political process, which Europeans should also press in their own conversations with the Houthis.

A second core issue relates to the nature of Yemeni statehood, namely the question of federalism and the role of national institutions. This, again, can only be resolved through intra-Yemeni negotiations, but the process needs careful focus and would benefit from external support. Europeans can share their multifaceted experience in building different forms of state institutions, constitutional arrangements, and inclusive governance structures while upholding key principles such as justice and accountability.

However, these political questions should not delay tackling other core challenges afflicting the country. The opportunity granted by the thaw in Saudi-Iran relations could help secure gains for the Yemeni people that strengthen bottom-up pressure on the conflict parties to reach a meaningful settlement. This will, for starters, require an immediate increase in humanitarian funding given the acute needs in the country and current funding shortfalls. But a longer-term approach is also required to address the structural underpinnings of the conflict dynamics. That is, regional and UN-led internal efforts to reach a sustainable peace in Yemen will likely fail without international support to revive Yemen’s economy, support local governance capabilities, address serious water shortages and environmental threats, and reform the country’s failing education system.

Here, immediate European steps could include working with the UN and regional partners, namely the Gulf Cooperation Council (GCC) states, to develop a plan for Yemen’s economic recovery. This could involve reviving the economic track of the peace process, working with the World Bank, strengthening the banking sector, and considering EU and GCC reconstruction support and investment. The EU could also support the GCC in advancing Yemen’s regional economic integration as part of a political settlement.

Europeans could also take advantage of COP28 in Dubai to launch initiatives with GCC partners to address severe threats to environmental security in Yemen. They should use this platform to focus on water scarcity and secure funding and action in support of the UN plan to salvage the decaying oil-filled Safer tanker moored off Yemen’s coast before it breaks apart.

Yemen has an unprecedented opportunity to extricate itself from a devastating decade of conflict. But, while the new Saudi-Iranian dialogue is a welcome start, it will not be sufficient on its own. Europeans should intensify efforts with the UN, regional actors, and Yemenis to take the necessary political and non-political steps forward to make peace a reality.