The Saudi-backed Yemeni government signed a power-sharing deal with a local group seeking a separate state in the south, an agreement designed to keep the country from fracturing and pave the way for broader talks to end its five-year-old war, people familiar with the talks said.

The Yemeni faction, called the Southern Transitional Council, fights alongside government forces in a U.S.-backed international coalition led by Saudi Arabia against the Iran-aligned Houthi rebels in the country’s north. But it is also seeking a separate state in the south.

Their rival agendas for Yemen triggered a major fight for control in August, when the STC launched a military assault against the Saudi-backed government in its interim capital, Aden.

The two sides signed the agreement Thursday night in Riyadh after the warring factions worked out a pact that will be overseen by Saudi forces, the people said.

The prime minister of Yemen is expected to fly to Aden in the next 10 days to oversee the deal, which creates a new government with 12 ministers from the north and 12 from the south.

Saudi Arabia has been working for months to negotiate a deal to prevent the STC, long backed by the United Arab Emirates, from breaking away from the country. The agreement creates a new power-sharing deal meant to ensure that the faction has a role in the new government.

“The Riyadh agreement is an important first step in bringing hope and success to a broader negotiation on regional peace,” a Saudi official said.

The war in Yemen has created what the United Nations calls the world’s worst humanitarian crisis. Thousands of civilians have been killed, and millions of Yemenis live on the brink of famine. The fight has effectively morphed into a proxy war pitting Iran-aligned Houthi fighters against a Yemeni government backed by Saudi Arabia, the U.A.E. and the U.S.

American support for the Saudi-led coalition has become a polarizing issue in Washington, where lawmakers from both parties have pushed President Trump to end the limited U.S. military support for Riyadh’s protracted war in Yemen.

Mr. Trump vetoed a measure this year to cut off U.S. military support for the Saudi-led war as his administration stepped up its diplomatic efforts to bring the fighting to an end.

Efforts to end the war accelerated in September when Houthi rebels, who ousted the Yemeni government in 2014 from the capital San’a, claimed responsibility for an attack on Saudi Arabia’s oil industry. Saudi and American officials rejected the Houthi claim and accused Iran of orchestrating the drone and cruise-missile attack. Tehran has denied involvement.

Saudi Arabia stepped up its diplomatic moves in the aftermath of the strike, and Thursday’s deal was seen as an important step by Riyadh.

The arrangement is meant to ensure that the STC has a voice in the new government, but it doesn’t require the group to forsake its demands for a separate state in southern Yemen.

Saudi officials hope the deal will pave the way for renewed talks with Houthi forces that can end the protracted fight in Yemen.

Write to Dion Nissenbaum at [email protected]

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