Houthi and pro-government forces exchanged nearly 200 prisoners in Taiz in central Yemen on Saturday, the largest such swap to take place in the embattled city since the beginning of a civil war last year, local sources said.

The exchange of 118 Houthis and 76 pro-government fighters, will raise hopes that a ceasefire declared in April may be taking hold in Yemen's third largest city after repeated violations by both sides.

The threat from an emerging common enemy may be galvanizing the two sides' efforts to cooperate. Islamic State militants appear to be behind a rapid uptick in suicide attacks and al Qaeda fighters continue to hold sway over swathes of Yemen, which abuts Saudi Arabia, the world's biggest oil exporter.

Fighting between the Iranian-allied Houthis and supporters of the internationally-backed government of President Abd-Rabbu Mansour Hadi has eased in much of Yemen since they announced the truce before the start of UN-sponsored peace talks in Kuwait.

But the fighting has continued in Taiz, with neither side able to extend control over the entire city. A rocket attack there in early June killed 12 civilians and wounded more than 122 others after it hit a busy market.

The conflict in Yemen has raged since March 2015, when a Saudi-led alliance intervened to try to restore Hadi to power after the Houthis, a movement from the Zaydi branch of Shia Islam, advanced on his temporary headquarters in Aden and forced him to flee to Saudi Arabia.

The talks in Kuwait have made little progress towards ending the war, which has killed more than 6,200 people and displaced more than 2.5 million, causing a severe humanitarian crisis.

More than 14 million Yemenis, more than half of the country's population, are in need of emergency food and life-saving assistance, according to a report this month by the United Nations and the Yemeni government.

Saudi Foreign Minister Adel al-Jubeir said on Thursday the kingdom now sought to prioritize fighting Islamic State and other militants in Yemen over its desultory arm-wrestle with the entrenched Houthi insurgents.