Houthis Yemen
Followers of the Shi'ite Houthi group attend a gathering at the group's camp near SanaaReuters

Yemen's leadership has reached a compromise with the Houthi leadership to end weeks of protests in the capital Sanaa.

Precise details of Thursday's deal are yet to emerge, although early reports suggest that the agreement includes a further reduction in fuel prices and the formation of a new government.

Houthi protesters had mobilised thousands of Yemenis in protest after the government lifted fuel subsidies in July, causing gasoline prices to soar to levels comparable with the United States.

The massive sit-in demonstrations had brought parts of the capital to a stand-still in recent weeks. Some of the protests turned violent when government forces reportedly opened fire on unarmed groups of demonstrators.

"A political breakthrough is imminent and there are negotiations to name a new prime minister," said a statement on the Ministry of Defence's website.

A Houthi negotiator told Reuters news agency that an agreement was signed on Thursday by the governor of Sanaa and the Houthi representative Hussein al-Ozzi.

The Houthi movement has waged a years-long armed struggle against the government, in a bid to improve the economic and political position of its Shi'ite followers based in the northern province of Saada. It says its followers are discriminated against by central government.

While the group was initially incorporated in the country's transitional dialogue, which followed the ouster of former president Saleh, the Houthis were eventually frozen out of the political process and returned to waging an armed campaign.

The latest protests saw the group mobilising ordinary Yemenis behind the call to reinstate fuel subsidies.

The country's President Hadi had already offered to reinstate 30% of the fuel subsidy and form a new government but it appears that the Houthis have achieved a bigger price cut and the opportunity to become involved in the political process again.