Yemeni officials said Shiite rebels have entered the southern coastal city of Aden today after heavy clashes Thursday morning.
The rebels entered the center of Aden on tanks or foot and entered the presidential palace but retreated for fear of airstrikes.
The palace, located atop a rocky outcrop that overlooks the Arabian Sea, was the last place where deposed President Hadi resided before heading off to Saudi Arabia.
This comes as a setback for the Saudi led coalition which started an air campaign against the Houthis and their allies last week. The Saudi coalition is composed of various Gulf nations but also Sudan and Pakistan.
The Houthi rebels are directly supported by forces loyal to ousted President Ali Abdullah Saleh that provide the Houthis with much needed heavy arms. They are also backed by Iran.
Saleh, who was president for 33 years, was forced out of office in 2011 after a wave of populist uprising broke out across the Middle East. Saleh was the fourth president to be toppled by the Arab Spring.
The situation proved to be a catalyst for various factions to battle for dominance in Yemen.
Alongside the breakdown of security forces during the wave of demonstrations, Al Qaeda emerged as a force that filled the power vacuum in northern central Yemen.
The Houthis located in the southern Yemen are fighting against the forces of Hadi in order to secede. However they also captured Sanaa, the capital of Yemen last year.
The United States had been active in combating Al Qaeda in Yemen but the armed forces were evacuated just last month.