Yemen's Houthis have dropped a threat to tax aid, a UN official told AFP Friday, in a significant step towards resolving a crisis that has jeopardised the world's biggest humanitarian operation.

United Nations leaders and humanitarian groups held crunch talks in Brussels on Thursday to address obstruction by the Iran-backed militia that has threatened to sever the lifeline to millions at risk of starvation.

They heard that vital supplies could be cut off, after humanitarian agencies complained of a deteriorating situation in the Houthi-controlled north where aid workers face arrest and intimidation.

But a UN official in Sanaa said the Houthis had backed away from a proposed 2.0 percent levy on NGOs pushed by the Houthi aid body SCMCHA, criticised for hobbling aid with interference and layers of bureaucracy.

The Houthi administration "in its meeting on 12 February, has decided to cancel the 2.0 percent that was included in SCMCHA regulations," said the official, who asked not to be named.

"The cancellation of the tax is a positive development for sure," he said, noting that other issues that still need to be dealt with relate to "access and bureaucratic impediments".

The outcome of the Brussels meeting has not been released.

But before the talks, the European commissioner for crisis management, Janez Lenarcic, demanded that all parties in the Yemen conflict "uphold international humanitarian law and guarantee safe and unimpeded access to humanitarian organisations."

Yemen has been driven to the brink of famine during five years of fighting between the Houthis based in Sanaa, and the Saudi-backed government based in the southern city of Aden.

The Brussels meeting heard that, while both sides have made trouble for humanitarian and UN agencies, the Houthi attempts to tax shipments triggered the latest crisis.

"It cannot continue, the biggest lifeline on earth is at stake. There are 20 million people in need in Yemen," Jan Egeland, head of the Norwegian Refugee Council, told AFP on Thursday.

"We cannot pay donated aid money to one of the parties to the conflict. So that is one of the many red lines that we are fearful of having to cross. We cannot do it," he said.

-AFP