SANAA (AFP) - Saudi-led air strikes on a missile depot in Yemen's rebel-held capital Monday sparked explosions that killed at least 28 people and wounded nearly 300, flattening houses and shaking faraway neighbourhoods.

Many more people were feared to have been killed after two strikes hit the hilltop depot, leaving a trail of destruction in the Fajj Attan area of Sanaa which was covered in thick clouds of smoke.

Yemen, strategically located near key shipping routes and bordering oil-rich Saudi Arabia, was plunged into chaos last year when the Iran-backed Huthi Shiite rebels seized Sanaa.

A coalition of Sunni Arab nations led by Saudi Arabia launched the air campaign against them last month, vowing to restore the authority of President Abedrabbo Mansour Hadi, who fled to Riyadh as the militiamen advanced on his southern refuge of Aden.

The US Navy said Monday that as a result of the instability in Yemen it has deployed the aircraft carrier USS Theodore Roosevelt and guided-missile cruiser USS Normandy in the Arabian Sea "to ensure the vital shipping lanes in the region remain open and safe".

Monday's coalition strikes triggered a series of blasts that sent shockwaves across Sanaa, leaving cars mangled, buildings gutted and streets strewn with debris.

Fires broke out at the missile base and a nearby petrol station, witnesses said, and the scorching heat could be felt from far off.

Civilians emerged from their shattered homes in the aftermath, some carrying suitcases and appearing stunned at the scale of the destruction.

Medics said at least 28 civilians were killed and almost 300 people were wounded.

The targeted base belongs to the missile brigade of the elite Republican Guard, which remained loyal to former president Ali Abdullah Saleh who has been accused of siding with the rebels.

The Saudi-led coalition says it has carried out more than 2,000 strikes since the start of the campaign, gaining complete control of Yemeni airspace and knocking out rebel infrastructure.

But its spokesman gave no comment about Monday's blasts in Sanaa in his latest media briefing.

The UN says the conflict has left hundreds dead and thousands wounded, and there has been increasing concern of a huge humanitarian crisis.

Calls have been growing for peace talks, but authorities on Monday rejected a Tehran offer of mediation.

"Any mediation effort coming from Iran is unacceptable because Iran is involved in the Yemen issue," said Yemeni Foreign Minister Riyadh Yassin.

"The Huthis and Saleh forces must withdraw from all cities and villages of Yemen, including Sanaa and Aden, return to (their northern stronghold of) Saada as civilians, and lay down their arms," he said.

"After that we can talk about dialogue and a political solution. But now there is no room for negotiations." The exiled authorities were boosted Sunday when the commanders of 25,000 troops in Hadramawt province, the country's largest and on the Saudi border, expressed their support for Hadi and his "constitutional legitimacy".

But rebel leader Abdulmalik al-Huthi vowed his forces would never surrender.

"Our Yemeni people will never give in - it will resist in the face of the savage aggression," he said on Sunday.

He promised to fight back using "all means and options" and said Riyadh "has no right to interfere" in Yemen.

Huthi also slammed as "unfair" a UN resolution imposing an arms embargo on the rebels and demanding they return to their highland stronghold.

But Saleh - forced out after a 2011 Arab Spring-inspired uprising - on Sunday welcomed the resolution as a "positive" step, with his party backing calls for a ceasefire and UN-mediated talks.

Fighting continued in the south, however, between advancing rebels and local fighters who have sided with Hadi. Eleven rebels and five southern fighters were killed in Huta, the provincial capital of Lahj.

Yemen has long struggled with deep tribal divisions and an insurgency by Al-Qaeda in the Arabian Peninsula (AQAP), considered by Washington as the jihadist network's most dangerous branch.

Al-Qaeda has taken advantage of the chaos to seize territory including an army camp in Hadramawt, an airport and provincial capital Mukalla.

On Monday, a US drone strike killed five Al-Qaeda suspects at Saeed, in Shabwa province.