Armed militiamen loyal to Yemen's fugitive President Abderabbo Mansour Hadi inspect the wreckage of a car reportedly belonging to Houthi rebels which was destroyed in an air strike by Saudi-led forces at the Caltex roundabout in the Mansoura district of the southern port city of Aden, on Friday.

AFP/Sanaa

Intense bombing by a Saudi-led coalition hit Yemen on Friday, three weeks into an air war against Iran-backed rebels as Al-Qaeda seized more ground in the chaos amid UN peace calls.

Columns of smoke rose over an arms depot targeted by coalition warplanes east of the capital Sanaa, witnesses said.

The facility belonged to the elite Republican Guard which remains loyal to former president Ali Abdullah Saleh.

Renegade troops loyal to Saleh are allied with the Houthi rebels whose sweeping advance forced President Abedrabbo Mansour Hadi to flee to Riyadh last month.

Following heavy air raids overnight in the north, coalition aircraft also hit the presidential palace in the southern city of Taez, the witnesses said.

Air strikes on the southern capital Aden killed a rebel chief in his car, a military source said.

Thirty-six other people died in bombing and fighting around Aden and Taez.

The UN says hundreds of people have died and thousands of families fled their homes in the war which has also left six Saudi security personnel dead in border skirmishes.

UN chief Ban Ki-moon called for an immediate ceasefire and began the hunt for a new peace envoy to the country where Al-Qaeda is expanding its territory.

Yemen "is in flames", Ban told reporters in Washington on Thursday. "I am calling for an immediate ceasefire in Yemen by all parties."

His remarks followed the resignation of his envoy Jamal Benomar, a Morocco-born career diplomat who had lost the confidence of Saudi Arabia and its allies. They accused him of being duped by the rebels.

New envoy sought  

Benomar had been instrumental in negotiating a deal that eased Saleh from office in February 2012 after a year of bloody protests against his three-decade rule.

In an April 1 interview with AFP, Yemen's Foreign Minister Riyadh Yassin, who is in exile with other government members in the Saudi capital, accused Saleh of making preparations to flee Yemen.

On Twitter, Saleh rejected such suggestions.

"I am not the type of person who goes looking for a place to settle in Jeddah or Paris... Nobody dares to ask me to leave my birthplace," he wrote.

Saudi Arabia's regional rival, Iran, renewed its calls for dialogue on Friday and said its foreign minister had spoken to the UN chief overnight.

Ban said he was in the process of finding a new envoy "who can be immediately deployed" to seek a political solution.

"The Saudis have assured me that they understand there must be a political process," Ban said.

The Yemen conflict has sent tensions soaring between Saudi Arabia and Iran.

Tehran is a key ally of the Houthis but denies arming them.

"This is not true," Iranian media on Friday reported Hossein Salami, deputy commander of the elite Revolutionary Guards, as saying.

Yemen has sunk further into chaos since the start of the air raids, most of which Western diplomats say have been carried out by Saudi Arabia itself.

Yemen is a front line in the US war on Al-Qaeda, which has exploited the growing turmoil to expand its control of areas in the southeast of the deeply tribal Arabian Peninsula country.

Qaeda overruns Mukalla

On Friday, Al-Qaeda overran a key army camp in the Hadramawt provincial capital Mukalla, seizing heavy weapons and consolidating their grip on the city, an official said.

Residents confirmed that the camp, which had remained loyal to Hadi, was taken "without resistance".

Despite the collapse of Hadi's government in Yemen, Washington has vowed to carry on its campaign against Al-Qaeda in the Arabian Peninsula.

Two suspected Al-Qaeda militants were killed in an apparent US drone strike in Shabwa province in the south overnight, a tribal source said.

The World Health Organisation, in a new toll, says 767 people have died in Yemen's war since March 19 and more than 2,900 were wounded. The majority have been civilians.

The UN launched an urgent appeal for $274mn (253mn euros) to provide emergency aid for what was already the region's poorest country.

The White House said President Barack Obama will host leaders of the Gulf Cooperation Council on May 13-14 to discuss Yemen and other regional issues.

Meanwhile, a Norwegian journalist, detained in Sanaa in late March, has been freed and is on his way home, Oslo's foreign ministry said.