The leader of Yemen's Iran-backed rebels said a political settlement with the exiled government was still possible after what he called the "short-term" setback of their ouster from second city Aden.

Abdulmalik al-Huthi said the rebels would welcome a new attempt by a third party to broker a deal after the failure of UN-brokered peace talks in Geneva in June.

"A political settlement is still possible," Huthi said in a speech broadcast by the rebels' Al-Masira television channel late on Sunday.

"We would welcome any (mediation) effort by a neutral party -- Arab or international," he said.

Huthi played down the withdrawal of the rebels and their allies from Aden in mid-July after four months of ferocious fighting.

"The advance made by the enemy in Aden will collapse," he said.

"It is a short-term situation which we will overcome despite all the money of Saudi Arabia."

Yemen's oil-rich neighbour has led an air campaign against the rebels since March and has also trained and equipped ground forces that were instrumental in securing Aden.

It was the rebels' entry into the southern port that forced President Abedrabbo Mansour Hadi and his internationally recognised government into Saudi exile in March.

Riyadh has justified its military intervention against the rebels and their allies, saying that they posed a threat to the kingdom's security.

But Huthi said that after more than four months of devastating bombing, the threat was the other way round.

"With the crimes that you are committing you pose a danger to Yemen," he said.

"To guarantee your security, you have to be a good neighbour."

The rebels have fired mortars, rockets and even Scud missiles across the border but say that they only did so in response to the Saudi-led air war.

A Saudi civilian was killed on Sunday but the majority of the 49 deaths so far have been soldiers.

Saudi civilian killed in shelling on Yemen border
Riyadh (AFP) Aug 2, 2015 - Shelling from Yemen killed a civilian Sunday across the border in Saudi Arabia, which has been leading air strikes against Shiite rebels in the war-torn country, a civil defence spokesman said.

The civilian died when a projectile hit his house in the Saudi city of Najran before dawn. It had been fired from an area of northern Yemen under the control of Iran-backed Huthi rebels, the spokesman was quoted as saying by official Saudi news agency SPA.

At least 49 people, mostly soldiers, have been killed on the Saudi-Yemeni border since a Saudi-led military coalition launched air strikes on the Huthi rebels and their allies in Yemen on March 26.

The military campaign aims to support forces loyal to exiled Yemeni President Abedrabbo Mansour Hadi, who fled Yemen to Saudi Arabia in late March as Huthis advanced on the southern city of Aden, threatening to take over the whole country.