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The Biden administration on Wednesday said it would list Yemen's Iran-backed Houthis as a specially designated global terrorist organisation, limiting the rebel group's ability to access funding as it continues to attack international shipping in the Red Sea.
The move comes as tensions soar in the crucial waterway, where the Houthis are targeting commercial and military vessels.
On Tuesday, US forces hit Houthi anti-ship missile launchers in Yemen, their third strike in a week.
The designation “is an important tool to impede terrorist funding to the Houthis, further restrict their access to financial markets, and hold them accountable for their actions”, National Security Adviser Jake Sullivan said.
The White House hopes the designation will pressure the Houthis into curtailing their attacks on the Red Sea, which have not abated despite several US-led strikes on Houthi militia sites in Yemen.
“If the Houthis cease their attacks in the Red Sea and Gulf of Aden, the United States will immediately re-evaluate this designation,” Mr Sullivan said.
The Houthis, who say their attacks on ships are in response to Israel's military operations in Gaza, said Washington's latest measure will have no effect on their stance.
“The American classification will not deter us from our support for Palestine [and] … will only make us more committed to our position in support of the Palestinians,” militia spokesman Mohamed Abdul Salam said on social media.
Secretary of State Antony Blinken delisted the Houthis as a foreign terrorist organisation and as specially designated global terrorists in February 2021, as the Biden administration sought to make it easier to get humanitarian aid into Yemen.
In its waning days, the Trump administration designated the Houthis a foreign terrorist organisation, despite strong objections from human rights and humanitarian aid groups.
The foreign terrorist designation barred Americans and people and organisations subject to US jurisdiction from providing “material support” to the Houthis.
A senior official defended the administration's decision to remove the Houthis from the Foreign Terrorist Organisation list back in 2021, saying it was the “correct step” at the time as it recognised the “very dire humanitarian situation in Yemen”.
By relisting the Houthis as specially designated global terrorists rather than as foreign terrorist organisation, the White House hopes to limit the impact on the Yemeni people, as the previous classification carries harsher restrictions.
The designation will go into effect in 30 days, which Washington said should give it time to ensure its effects only damage the Houthis, not Yemeni citizens.
“We're rolling out, as we take this action, unprecedented carveouts and licences to help prevent adverse impact on the Yemeni people,” a senior administration official said.
“The people of Yemen should not pay the price for the actions of the Houthis.”
On Tuesday, Mr Sullivan warned that Washington remains “vigilant” against the possibility that recent violence in the Red Sea may be “on a path of escalation”.
But Mr Sullivan, who spoke at the World Economic Forum in Davos, said Washington “sees a pathway” towards working with the Houthis.
“We have to guard against and be vigilant against the possibility that, in fact, rather than heading towards de-escalation, we are on a path of escalation that we have to manage,” Mr Sullivan said.
He said managing regional escalation “to the maximum extent possible” and getting “on a path of diplomacy” remains a “central focus” of Washington’s strategy in the Middle East amid the continued threat of Israel’s war in Gaza spilling into the wider region.
Ellie Sennett contributed to this report.
Yemenis protest in Sanaa after US and UK hit Houthi sites – in pictures
