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A draft UN-led peace plan for Yemen has been revealed that could see Houthi rebels hand over ballistic missiles in exchange for a place in a new provisional government,  on Thursday.

The deal - which is still not being made public and could be altered - lays out a plan to end the four-year war in Yemen, which has seen Iran-backed Houthi rebels at war with a Saudi-led Arab military coalition and Yemeni government forces.

It reveals a plan that could see government forces take control over the country and militias disarmed - including the Houthis.

"Heavy and medium weapons including ballistic missiles shall be handed over by non-state military actors in an orderly and planned fashion," the report states, according to Reuters.

"No armed groups shall be exempt from disarmament."

This likely refers to UAE-backed armed southern separatist groups who have clashed with government forces, along with fighters linked to al-Islah Party.

The disarmament would include Houthi's ballistic missile arsenal. The rebel groups have repeatedly fired missiles at Saudi cities, including the capital Riyadh.

The deal also says that Saudi and UAE armed forces would also halt their bombing of Yemeni towns and cities, which has killed thousands of civilians.

A transitional government would see Houthi elements included in the administration with the deal mentioning that "political components shall be adequately represented".

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The Houthis - who control the capital Sanaa - would be unlikely to agree to a deal with President Abd Rabbo Mansour Hadi's government, unless they were granted some powers in a new unified authority.

UN envoy Martin Griffiths is expected to reveal the peace plan mid-June.

Previous attempts to establish peace deals and ceasefires in the war-torn country have failed.

The UAE, which has played a key role in the conflict, has indicated that it would support the UN initiative.

"Politically, there is a necessity to back the UN effort. It will ultimately mean a transition, to a new political order in Yemen. Clearly with the UN effort, the military and political process will see the Houthis pull out of urban centres," UAE Foreign Minister Anwar Gargash told Emirati daily The National.

He said the UAE would only back the deal if the Houthis hand over all cities and towns to the government, including the capital Sanaa.

UAE forces are taking part in an offensive on the port of Hodeidah with an assault on the city expected.

The UN and aid agencies have warned against an offensive on the port, which could plunge Yemen into famine.

A blockade on the port has also seen widespread hunger and the potential for a catastrophic famine.

Due to a lack of drugs, medical care and a breakdown of sanitation has seen Yemen gripped by disease, including cholera.

Saudi-led bombing has seen hospitals hit, along with other civilian areas.

War broke out in September 2014, when Houthi forces took over the Yemeni capital. Saudi Arabia and the UAE entered the war in 2015, intensifying the conflict and seeing thousands more killed in bombing.

Agencies contributed to this story.