The UN special envoy to Yemen, Jamal Benomar, has warned that the country may be on the brink of civil war and accused all sides of contributing to the political and economic turmoil.

Yemen is slipping further into chaos as the Houthis, an Iranian-backed Shia group from the north, consolidate their grip on power after seizing the capital in September and sidelining the central government.

Addressing the UN security council on Thursday, Benomar said: "Yemen is at a crossroad: Either the country will descend into civil war and disintegration" or a political transition will work.

Speaking from Yemen, Benomar said he is "in the middle of delicate negotiations" daily with parties involved.

Following Benomar's statements, Ban Ki Moon, the UN secretary-general, issued a warning before the council saying that "Yemen is collapsing before our eyes" and the international community can not stand by and watch.

The Houthi fighters have been advancing into southern territories, confronting Sunni tribesmen, other groups and the local branch of al-Qaeda.

Benomar also warned the council that instability in Yemen is creating conditions for al-Qaeda's re-emergence.

The statement came before al-Qaeda-affiliated fighters seized an army base in southern Yemen and held soldiers prisoner on Thursday.

The US, Britain and France have closed their embassies in Sanaa, citing security concerns.

In a separate interview on Wednesday, Benomar said Yemen's economy was facing imminent collapse and called for more dialogue to reach a peaceful settlement.

"They are all party to what has happened so far, they have all made mistakes and follies and sometimes groups resorted to violence to realise political aims," Benomar said.

Al Jazeera