Yemen's Shiite Huthi rebels Sunday demanded an international probe into an air strike that killed more than 140 people at a funeral, after a Saudi-led Arab coalition admitted "wrongly" hitting it.

The October 8 raid, condemned by Human Rights Watch as an "apparent war crime", was one of the deadliest since the pro-government coalition launched an air campaign against the rebels and their allies in March 2015.

The coalition's acknowledgement that it wrongly hit the funeral "does not clear its leadership of violating international humanitarian law and all humanitarian norms and conventions", said the rebel-controlled foreign ministry.

UN chief Ban Ki-moon "should form an independent and international investigation committee headed by a high-profile, neutral and international personality as soon as possible to probe war crimes committed by the coalition in Yemen", it said in a statement.

The Riyadh-based coalition acknowledged on Saturday that the air strike in which more than 525 people were also wounded was based on "incorrect information".

It pledged "appropriate action" against those responsible and compensation for families of the victims.

The air strike prompted an international outcry and strong criticism, including from Saudi Arabia's closest Western allies.

Yemen's conflict has killed nearly 6,900 people, more than half of them civilians, since the coalition launched its operations, according to the United Nations.