Yemen's government and Iran-backed rebels agreed Tuesday to free half of the prisoners and detainees held by both sides, in the first breakthrough in peace talks that began last month.

Officials from the two delegations told AFP that a working group formed by the UN special envoy Ismail Ould Cheikh Ahmed, had reached an agreement to release the prisoners and detainees within 20 days.

The government's official news agency Saba also confirmed the deal, citing the official delegation.

The UN envoy said the two sides were expected to finalise the agreement on Wednesday.

"They agreed in principle to explore a proposal to release 50 percent of all detainees held by each side ahead of the holy (Muslim fasting) month of Ramadan and eventually release all detainees," said Ould Cheikh Ahmed.

"They agreed to continue discussions in the next session scheduled for May 11," he said in a statement.

The issue was discussed as part of confidence-building measures.

There has been mounting international pressure to end the Yemen conflict, which the United Nations estimates has killed more than 6,400 people and displaced 2.8 million since March last year.

"It was agreed during the meeting to release 50 percent of the prisoners and detainees within the next 20 days," said Mane al-Matari, media adviser to Yemen's foreign minister who heads the government delegation.

A source close to the Huthi rebel delegation also said an agreement had been reached, describing it as "an exchange of prisoners".

The two sides would meet again on Wednesday to finalise the mechanism on how and when the exchange will take place, Matari said.

Matari estimated that their number is in the "thousands", but the rebel source said there may be only hundreds of prisoners involved.

Following a two-day interruption, the two delegations resumed face-to-face talks on Monday after mediation efforts and an appeal by the UN envoy.

Two other working groups, spanning military, security and political issues, also discussed on Tuesday more complicated issues.

Those issues include implementing a UN Security Council resolution which orders the Huthis to pull out of territory they occupied in a 2014 offensive and surrender heavy arms they captured.

- Constructive Discussion -

Ould Cheikh Ahhmed described the discussion as "constructive" as "common grounds" emerged but acknowldged differences were still substantial.

"We acknowledge that the differences remain substantial and we continue to work hard to bridge the gap between the two parties," he said.

The rebels demanded the formation of a consensus transitional government to handle other issues and the delegation of President Abedrabbo Mansour Hadi insisted he is the legitimate head of state, sources close to the talks said.

The Yemen conflict pits the pro-Iranian Huthis and their allies loyal to former president Ali Abdullah Saleh against forces fighting to defend Hadi's internationally recognised government, supported by a Saudi-led Arab coalition.

Pro-government forces pushed the rebels out of five southern provinces last year with air and ground support from the coalition.

But the Huthis continue to control the capital Sanaa as well as large parts of the country's north and west, and the Saudi-led coalition has drawn strong criticism over heavy civilian casualties.

Hours after the talks resumed on Monday, Saudi air defences intercepted a ballistic missile fired from Yemen, the coalition said.

Before that, coalition aircraft hit a military base captured by rebels north of Sanaa, killing at least 11, a military official said.

Coalition spokesman Ahmed Assiri told Egyptian Dream television late Monday that if Kuwait peace talks fail "we will storm the capital Sanaa and decide the battle in Yemen," by military means.

The talks follow two failed peace attempts in June and December last year in Switzerland.

The Huthis exchanged prisoners with Saudi Arabia in March after unprecedented talks mediated by tribes along the frontier, where dozens have been killed in cross-border shelling.