The fast-moving crisis in Yemen has opened a major feud between the two Gulf powers and fractured the coalition of forces, headed by the internationally recognised government, who are fighting the Iran-backed Houthi movement.
Rapid government gains since Friday have reversed many of the Southern Transitional Council (STC) gains last month and cast doubt on the viability of its intention to hold a referendum on independence within two years.
Saudi-backed forces had already taken control of key locations in Hadramout, a large province with stretches of desert along the Saudi border.
STC forces blocked roads leading to Aden from the northern provinces, residents said. The group on Saturday appealed for regional and international leaders to intervene against what it described as a "Saudi-backed military escalation".
In a statement, it added that northern Islamist factions - an apparent reference to the Islah party that is part of the internationally recognised government - had targeted civilians and vital infrastructure.
The UAE, the main STC supporter, urged restraint saying it was "deeply concerned" about the escalation in Yemen.
Yemen, split for a decade between warring regions, sits at a highly strategic location between the world's top oil exporter Saudi Arabia and the Bab al-Mandeb strait that guards the vital sea route between Europe and Asia.
The STC has for years been part of the internationally-recognised government that controls southern and eastern Yemen and is backed by Gulf states against the Houthis.
Overnight the leader of that government, Presidential Council chief Rashad al-Alimi, said he had asked Saudi Arabia to host a forum to resolve the southern issue, adding he hoped this would bring all southern factions together.
Aden airport, the main transport hub for areas of Yemen outside Houthi control, has been closed since Thursday after a dispute over new restrictions announced by the internationally recognised government on flights with the UAE.
The STC and Saudi Arabia have accused each other of responsibility for shutting off air traffic. The STC in its statement on Saturday said southern Yemen was being subjected to a land, sea and air blockade.
The crisis began early last month when the STC suddenly seized swathes of territory including Hadramout, establishing firm control over the whole territory of the former state of South Yemen that merged with the north in 1990.
The leadership of the internationally recognised government, which had been based in Aden and included several ministers from the STC, departed for Saudi Arabia, which regarded the southern move as a threat to its security.
The crisis triggered the biggest split in decades between formerly close allies Saudi Arabia and the UAE, as years of divergence on critical issues came to a head, threatening to upend the regional order.
Fellow Gulf monarchy Qatar, which has long had regional policy differences with the UAE, said it welcomed efforts by Yemen's internationally recognised government to address the southern issue.
Early this week Saudi Arabia bombed a base in Hadramout and asked all remaining UAE forces in Yemen to depart, calling this a red line for its security, and the UAE complied.
The STC declaration on Friday that it wants a two-year transition period leading to a referendum on independence for a new South Arabian state was the movement's clearest indication yet of its intention to secede.
