Representatives of the Saudi-backed Yemeni government and Houthi rebels held their first face-to-face talks in Rimbo, Sweden, as the UN announced it was seeking $4 billion to provide humanitarian aid to the war-stricken nation.

A first step towards trying to resolve the Yemen conflict was reached on the fifth day of talks in Sweden, when Houthi and Yemeni government representatives held direct talks over a planned prisoner exchange. Negotiations over a prisoner swap between the two warring sides are one of several confidence-building measures aimed at trying to end the devastating war in the world’s poorest Arab nation.

"This is an opportunity which is rare,” UN Special Envoy for Yemen Martin Griffiths told reporters in Sweden Monday. “It's been two-and-half years and that time is now finished and I hope we are on the beginning of a new journey."

“It was the first official update from UN envoy Martin Griffiths,” explained FRANCE 24’s Luke Shrago, reporting from Rimbo. “He gave us a rundown moving forward of the Yemeni peace process. There was great optimism over the fact that both sides are working together, with the hope that this could well be the first round of many such consultations.”

Delegates from both sides on Monday said the prisoner swap -– which will be implemented by the International Committee of the Red Cross -- had been largely finalised.

The Yemeni government, which is backed by Saudi Arabia and its military allies, has been battling the Iran-backed Houthi rebels for control of Yemen for nearly four years, pushing the impoverished country to the brink of famine.

‘Not there yet’ on Taiz and Hodeida fighting

Besides the prisoner swap, the discussions in Sweden are also set to tackle the fate of the rebel-held port city of Hodeida, vital to aid and food imports, and Yemen's third-largest city Taiz, the scene of some of the country's most intense battles.

Other issues on the table include humanitarian corridors, the reopening of the defunct Sanaa international airport and a massive prisoner swap.

While progress has been made on the prisoner exchange, the resolution of the crisis in Taiz and Hodeida, however remained thorny.

"These are two major population zones in Yemen caught in war," explained Griffiths. "I'm hopeful that we can reach agreements on the de-escalation to reduce the fighting in both places...We're not there yet."

Initial drafts of the proposals on Hodeida and Taiz, seen by AFP Monday, call for a mutual ceasefire between the two parties.

The Hodeida draft stipulated that the Saudi-led military coalition fighting the Houthis would cease an offensive on the rebel-held city in exchange for a Houthi withdrawal.

The area would then be put under the control of a joint committee and supervised by the UN. The document does not propose the deployment of UN peacekeeping troops.

Griffiths said the UN had since simplified that draft, which is still under study by the Yemeni delegations.

"We are always redrafting, so some of those documents that you've seen" have changed, Griffiths told reporters.

UN seeks $4 billion for humanitarian aid

Meanwhile the UN on Monday said it was seeking $4 billion to provide humanitarian aid to some 20 million Yemenis next year -- or about 70 percent of the war-stricken country's population.

Each year, the world body needs an additional billion dollars, UN Under Secretary General and Emergency Relief Coordinator Mark Lowcock said.

A donors' conference backed by Sweden, Switzerland and the UN is set to take place on February 26 in Geneva.

"We didn't have a cessation of hostilities," although the violence appears to have decreased, added Lowcock, who recently traveled to the country, expressing hope for a positive outcome to peace negotiations taking place in Sweden between the parties under UN auspices.

He denounced obstacles to the delivery of humanitarian aid, noting that Yemen also needs help to bring its economy back from the brink.

(FRANCE 24 with AFP)