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Qatar has hailed a ceasefire agreement between Yemen's warring parties, saying it was a step towards ending an "absurd" conflict that has been exacerbated by a Saudi-led military intervention.

The Qatari foreign ministry made the comments in a carried by the official news agency on Thursday.

The Houthi rebels and the Saudi-backed government struck a deal on Thursday to implement a cessation of hostilities in the vital port city of Hodeida, where a famine has been looming due a the Saudi-enabled blockade.

"This is an important step towards ending this absurd war, which has caused much suffering for the Yemeni people," the statement said.

"The ministry expresses hope that the parties of the Yemeni crisis would reach understandings on the outstanding issues in the next round of consultations," it added.

If implemented, the deal on the Hodeida port, a key gateway for aid and food imports, could bring relief to a country where 14 million people stand on the brink of famine.

In a highly symbolic gesture on the seventh and final day of the UN-brokered peace talks in Sweden, Yemeni Foreign Minister Khaled al-Yamani and rebel negotiator Mohammed Abdel Salam shook hands to loud applause.

Impoverished Yemen has been mired in fighting between Iran-backed Houthi rebels and troops loyal to President Abedrabbo Mansour Hadi since 2014.

The war escalated in 2015 when a Saudi-led military coalition stepped in on the government's side.

Qatar left the Saudi-led coalition in the wake of a diplomatic row between Doha and its neighbours that broke out last year.

The gas-rich Gulf state has since donated funds to deliver vital food aid to Yemen.

The conflict has killed nearly 10,000 people, according to the World Health Organization. But other rights groups believe the actual toll to be far higher.

Saudi Arabia, Iran and the United States have all also hailed the deal on Hodeida.