Yemen’s president says he has sacked his deputy and transferred his own powers to a presidential council, as Saudi Arabia announced billions of dollars in aid and urged him to begin talks with the Houthis to end the country’s devastating war.

President Abd-Rabbu Mansour Hadi said on Thursday that the new body will assume the duties of both the president and his deputy.

"I irreversibly delegate to this presidential leadership council my full powers,” Hadi said in a televised statement early on Thursday, the final day of peace talks held in Riyadh, Saudi Arabia’s capital.

Following the announcement, Saudi Arabia said it was arranging $3bn to support the country’s war-ravaged economy.

$2bn would come from Riyadh and a further $1bn from the United Arab Emirates (UAE), which is part of a Saudi-led military coalition backing Hadi’s internationally-recognised government against the Iran-aligned Houthis.

Riyadh also called for an international conference on Yemen, according to state media.

"The fact that we are turning the page on the past and that all these groups are coming together, and the Saudi aid and investment … the stars are aligning a little on Yemen,” William Lawrence, a political science professor at the American University in Washington, DC told Al Jazeera. "Let’s hope they bear fruit.”

Yemen has been at war since late 2014 when the Houthis seized the capital, Sanaa, and Hadi, who had been elected for a two-year transitional period in 2012 after mass anti-government protests, fled south.

The long-running conflict has created what the United Nations has described as the world’s worst humanitarian crisis.

The country is in the first week of a two-month UN-brokered truce. It is the first nationwide break in hostilities since 2016.

The Houthis, however, are not participating in the Yemen talks.

"The announcement that Hadi is ceding his powers to a presidential council made up of key political and military figures with direct roles on the ground is A Big Deal,” Crisis Group analyst Peter Salisbury wrote on Twitter. "Most consequential shift in the inner workings of the anti-Huthi block since war began. How this will actually work in practice will be … complicated to say the least.”