By Mohammed Mukhashef
ADEN (Reuters) - Houthi forces in Yemen backed by allied army units seized a key air base on Wednesday and appeared poised to capture the southern port of Aden from defenders loyal to President Abd-Rabbu Mansour Hadi, local residents said.
The Houthis and their military allies later advanced to within 40km (25 miles) of the city, where Hadi has been holed up since fleeing the group's stronghold in the capital Sanaa last month.
Yemen's slide toward civil war has made the country a crucial front in mostly Sunni Saudi Arabia's rivalry with Iran, which Riyadh accuses of sowing sectarian strife through its support for the Houthis.
Sunni Arab monarchies around Yemen have condemned the Houthi takeover as a coup and have mooted a military intervention in favor of Hadi in recent days.
The bodies of fighters from both sides lay on the streets of the outskirts of Houta, capital of Lahej province north of Aden, residents said.
In Aden, heavy traffic clogged Aden as parents brought schoolchildren home and public sector employees obeyed orders to leave work. Eyewitnesses said pro-Hadi militiamen and tribal gunmen were out in force throughout the city.
The northern militia alongside army units loyal to Yemen's powerful ex-president Ali Abdullah Saleh have driven back an array of tribal fighters, army units and southern separatist militiamen loyal to embattled president Hadi.
The Iranian-backed Houthi Shi'ite militants took control of Sanaa in September and seized the central city of Taiz at the weekend as they move closer to Aden.
Houthi leaders have said their advance is a revolution against Hadi and his corrupt government, and Iran has blessed their rise as part of an "Islamic awakening" in the region.
Yemeni officials denied reports that Hadi had fled Aden.
SLIDE TOWARDS WAR
While Hadi has vowed to check the Houthi push south and called for Arab military support, his reversals have multiplied since heavy fighting first broke out in south Yemen on Thursday and the Houthis began making rapid advances southward.
In Houta, storefronts were shuttered and residents reported hearing bursts of machine gun fire and the bodies of fighters from both sides lying in the streets.
Eyewitnesses said Houthi fighters and allied soldiers largely bypassed the city center and traveled by dirt roads to the southern suburbs facing Aden.
While the battle is publicly being waged by the Shi'ite Muslim Houthi movement, many Adenis believe that the real instigator of the campaign is former president Ali Abdullah Saleh, a fierce critic of Hadi.
It was Saleh who was the author of the city's previous humiliation in 1994, when as president he crushed a southern secessionist uprising in a short but brutal war.
A body of army loyalists close to Saleh on Wednesday warned against any foreign interference, saying in a statement on Saleh's party website that Yemen would confront such a move "with all its strength."
(Reporting By Mohammed Mukhashaf, Sami Aboudi, Mohammed Ghobari and Noah Browning; Editing by Giles Elgood)