The move signals that regional rifts are easing after rivals Saudi Arabia and Iran agreed to restore relations last month following years of hostility and backing opposite sides in Middle Eastern conflicts, including Yemen.

A visit by Saudi officials to Sanaa is an indication of progress in Oman-mediated talks between the kingdom and the Iran-aligned Houthi movement, which run in parallel to United Nations peace efforts.

Oman, which shares borders with Yemen, has been trying for years to bridge differences between Yemen's warring parties, and more broadly between Iran and Saudi Arabia and the United States. A permanent ceasefire in Yemen would mark a milestone in stabilising the Middle East.

If an agreement is reached, the parties could announce it before Islam's Eid holiday starting April 20, the sources said.

The Saudi and Yemeni governments did not immediately respond to requests for a comment.

The Houthis, who ousted the internationally recognised government from Sanaa in late 2014, de facto control north Yemen and say they are rising up against a corrupt system and foreign aggression.

They have been fighting against a Saudi-led military alliance since 2015 in a conflict that has killed tens of thousands and left 80% of Yemen's population dependent on humanitarian aid.

FERTILISERS AND BATTERIES

The discussions are focused on a full reopening of Yemen's ports and airports, payment of wages for public servants, a rebuilding process and a political transition, the sources said.

Saudi Arabia restarted its direct talks with the Houthi group last summer after both sides failed to renew a United Nations-brokered truce deal.

The U.N. hopes to resume a peaceful political process which would lead to a transitional unity government, if a ceasefire agreement is reached.

U.N. Special Envoy Hans Grundberg met with senior Omani and Houthi officials in Muscat this week and discussed ways to make progress towards an inclusive Yemeni-led political process, his office said.

Following years of a bitter rivalry and armed conflicts between Saudi Arabia and Iran, their biggest trade partner China recently stepped in to work with both sides and improve relations.

Beijing, concerned with stability in a region that covers most of its crude oil needs, recently brokered a deal between Riyadh and Tehran to restore diplomatic relations.

In an additional sign of progress in Yemen's peace efforts, the Saudi-led coalition lifted eight-year-old restrictions on imports headed for Yemen's southern ports, allowing commercial ships to dock directly there, including Aden, the Saudi-backed government said.

This follows the easing of restrictions in February on commercial goods entering the Houthi-held western port of Hodeidah, the country's main seaport.

Abu Bakr Abeed, deputy head of Yemen's Chambers of Commerce, told Reuters ships would not have to stop at the Saudi Red Sea port of Jeddah for security checks for the first time since the Saudi-led coalition intervened in Yemen in 2015.

Abeed said more than 500 types of goods would be allowed back in Yemen through southern ports, including fertilisers and batteries, after they were removed from a list of banned products.

The Saudi-led coalition had since 2015 imposed severe restrictions on flow of goods into import-reliant Yemen, where war has devastated the economy, contributing to what the United Nations has called the world's worst humanitarian crisis.