Separatists from Yemen's Southern Transitional Council said on Thursday that Saudi-aligned government forces would enter territories seized by the UAE-backed group in recent weeks, marking an apparent climbdown following days of tension in the Gulf.
The surprise offensive by the STC, taking control of resource-rich Hadramawt and Mahra provinces last month, has brought the United Arab Emirates and Saudi Arabia, officially allies in Yemen, to a point of unprecedented escalation.
On Tuesday, the Saudi-led coalition in Yemen struck what it said was a shipment of Emirati weapons destined for the separatists, a claim Abu Dhabi has denied, and called for STC forces to withdraw.
In its statement on Thursday, the STC said it would continue to operate in the regions but had agreed to the deployment of the Riyadh-backed National Shield government force in the areas.
"Today, we launched an operation to integrate the southern National Shield forces so that they can assume the responsibilities and missions that fall to our armed forces," they announced.
The statement said a National Shield brigade would be deployed in "areas of the Hadhramaut and Mahra governorates, as agreed.
Saudi Arabia, the main backer of the Yemeni government, had repeatedly urged the STC to withdraw from recently conquered territories, particularly areas along its southern border, and earlier conducted airstrikes against its positions.
Following the strikes on Tuesday, the UAE's defence ministry said it would withdraw its last remaining troops in Yemen after Saudi Arabia imposed a 24-hour deadline for their removal.
The Yemeni government, of which the STC is a part, comprises a fractious coalition of groups united by their opposition to the Iranian-backed Houthi rebels who seized the capital Sanaa in 2014 and subsequently large parts of northern Yemen.
While both are opposed to the Houthis, Riyadh and Abu Dhabi back different members of the Yemeni government.