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's warring parties should revive efforts for a broader deal to end its devastating seven-year conflict, the country's top envoy said on Tuesday after failed efforts to renew a truce deal on Sunday.

The UN special envoy for Yemen Hans Grundberg told Reuters in that this is a particularly sensitive period of time in Yemen. "Any small incident could spark something that could have devastating consequences."

"Luckily we have not seen a military escalation and this is so far so good," he added.

Grundberg said late on Sunday he would continue pushing for an extended and expanded deal between a Saudi-led coalition and the Houthi group, both under intense international pressure to come to an agreement.

The initial two-month truce was agreed in April and renewed twice despite grievances by both sides over its implementation in a conflict that is widely seen as a proxy war between Saudi Arabia and Iran.

"So I would urge all sides to exercise restraint and allow discussions that we have ongoing to bear fruit and...move Yemen out of the violence we have seen for the last seven years," Grundberg said.

He added the two sides failed to renew the truce because they were still far away on the latest UN-brokered proposals to pay civil service wages, increase fuel shipments, add air flights, open roads and expand military de-escalation.

A particular sticking point was a mechanism for paying civil servants that would benefit all Yemenis and alleviate their worsening economic plight, he added.

"It's complicated. It's one that has been on the table and the parties have wanted a resolution for a long period of time," Grundberg added.

An expanded deal was crucial to build on progress that delivered more fuel shipments for the first time in years from the main Red Sea port of Hodeidah held by the Houthis, and allowed commercial air flights to resume for over 26,000 passengers to and from Sanaa airport, Grundberg added.

"There has been progress here and we have the possibility of capitalizing on this progress," he added.

The truce had led to a significant reduction of violence in a conflict that aid workers and officials say has killed tens of thousands, devastated the economy and left millions hungry.

Grundberg said civilian and military casualties have gone down, which is an important first step.

"This is not a small achievement," he said.

The UN special envoy said the war-torn country could ill afford a continuation of a devastating conflict.

"The fact it has gone on for seven years is seven years too many and here we have reached a possibility with the six months we have behind us to build on a peaceful future," Grundberg added.

(Reuters)