RIYADH - Yemen's exiled government has said it welcomes in principle a US-backed plan to resume peace talks with Iran-backed rebels on the basis of forming a unity government.

In Sanaa, the rebels said they had discussed the establishment of a government, and said they would respond "positively" to any attempt to end the conflict.

Meeting in Riyadh, the Yemeni cabinet gave an "initial welcoming to the ideas that came out of the meeting in Jeddah," which included US Secretary of State John Kerry, the government's sabanew.net website said late Saturday. Kerry announced a fresh international peace initiative to resolve the 17-month-old conflict after meeting Thursday with Gulf counterparts, a British minister and the UN envoy to Yemen. The plan offers Huthi rebels and their allies participation in a unity government but demands their withdrawal from Sanaa and other key areas, as well as surrendering heavy weapons to a third party.

The rebels had been demanding a unity government as the first step towards resolving Yemen's war. On Sunday, they said they had "discussed the necessary steps for the establishment of a government in the shortest possible time", at a meeting of the recently created "Supreme Council" in the capital.

The rebel-controlled news agency said they also gave the assurance that they would "respond positively to any initiative on stopping the aggression and lifting the blockade... and on achieving the desired peace".