The US is purposely blocking a Yemen peace deal that was negotiated between the Houthis and Saudi Arabia, The New York Times reported on Tuesday.

The US decision to re-designate the Houthis as "Specially Designated Global Terrorists" will block the payment of public sector workers living in Houthi-controlled Yemen, who have gone without pay for years.

The payment of civil workers has been a key demand of the Houthis and is part of the first phase of the peace deal. The Houthis had asked for the salaries to be paid for using oil revenue that goes to the Saudi-backed Yemeni government, whose leaders are mainly based in Saudi Arabia. It's unclear if the Saudi side agreed to the Houthi demand or if they decided to pay the salaries using other means.

The first phase of the peace deal would also fully open Yemen's airports and sea ports that have been under blockade since 2015, another aspect of the deal that will be complicated by the new US sanctions, which will go into effect later this month.

A US official told the Times that the US would only allow the payment of Yemeni civil salaries if the Houthis choose the path of "peace" and stop attacking shipping in the Red Sea. But the Houthis, who govern the most populated area of Yemen, have been clear the operations will only stop once the Israeli slaughter of Palestinians in Gaza ends.

Instead of pressuring Israel to stop its onslaught, President Biden launched a new war against the Houthis, which has dramatically escalated the situation. The Houthis are now targeting American and British commercial shipping, and there's no sign they will back down.