A Saudi-brokered deal to end the dispute between Yemen's government and southern secessionists in the city of Aden is nearing completion, UN special envoy Martin Griffiths said on Thursday.
Mr Griffiths said in Riyadh that the situation in Aden had improved markedly from August when clashes threatened to open a new front in a four-year war.
He told the UN Security Council that an agreement between the government and the Southern Transitional Council was imminent.
Mr Griffiths said violence in the south and elsewhere in the country had fallen in the past month.
He praised confidence-building measures, including the release by Houthi rebels of 219 prisoners in the capital Sanaa. Talks are under way to free more.
The talks between the government and council came after a stand-off that followed the separatists seizing state offices two months ago.
"Today I want to claim that there are signs of hope, even in the middle of misery," Mr Griffiths said of the Riyadh talks, which started last month in Jeddah.
“I understand we are not quite there yet but it does seem significant progress has been made.”
On September 20 the Iran-backed Houthis, who have been fighting government forces since 2015 after seizing Sanaa, said they would cease all drone and missile attacks on Saudi Arabia.
That had helped to ease tension, Mr Griffiths told the council.
“One can clearly see that there are opportunities here that have been grasped,” he said.
They included the release of prisoners and ships entering the Red Sea port of Hodeidah carrying much-needed fuel in recent days.
Saudi Arabia, which leads an Arab coalition including the UAE against the Houthis, has been mediating talks between the government and the STC.
IN April, the STC demanded to be included in international talks led by the UN, which last year led to negotiations in Sweden and a truce in Hodeidah.
Yemen's government had insisted that no talks over Aden could take place until the STC withdrew its fighters.
Britain's top diplomat at the UN, Karen Pierce, indicated that the southern group was about to enter a power-sharing agreement.
“We need a deal that brings southern representatives into the government,” Ms Pierce said.
Nicolas de Riviere, the French ambassador to the UN, said an agreement over Aden was expected soon.
Russias ambassador, Vassily Nebenzia, said there was “significant momentum” towards ending the southern dispute.
The head of the STC, Aidarous Al Zubaidi went to Riyadh on Wednesday, a post on his Twitter account said.
The deal reportedly calls for a government reshuffle to include the STC, which seeks self-rule in the south, and restructuring the armed forces under Saudi supervision.