Special Forces chief in Aden Brig. Gen. Abdel Hafez al Saqqaf rejected a decision by President Abd Rabbuh Mansour Hadi to dismiss him.
Saqqaf, affiliated to Houthis, rejected a mediation committee bid to accept the president's order.
The negotiations reached a dead end, a mediation committee source said.
Meanwhile, a number of the Special Forces cut off a road around the Special Forces headquarters while more forces and vigilante groups were stationed outside the presidential palace in Aden.