(Adds Houthi comment, Iran ship details)
By Mohammed Ghobari and Sami Aboudi
CAIRO/DUBAI, May 21 (Reuters) - Saudi shells hit an international aid office in Yemen on Thursday killing five Ethiopian refugees, a local official said, while violence across the country put United Nations-led peace talks in doubt.
The official said that 10 other refugees were wounded when artillery fire and air strikes hit the town of Maydee along Yemen's border with Saudi Arabia in Hajja province, a stronghold of the Iran-allied Houthi rebel group that a Saudi-led Arab alliance has been bombing for eight weeks.
Saudi spokesman Brigadier General Ahmed Asseri denied Saudi involvement and blamed the Houthis. "If the report is correct, it would be the responsibility of the Houthis, who have a big presence in the area," Asseri told Reuters by telephone.
Saudi Arabia has previously denied responsibility for civilian deaths in remote northern areas that residents and local officials ascribed to Saudi fire.
U.N. Chief Ban Ki-moon on Wednesday announced peace talks for Geneva on May 28 to try to find a way out of the crisis that triggered outside intervention by an Arab coalition on March 26.
Rajeh Badi, spokesman for Yemen president Abd-Rabbu Mansour Hadi, said consultations were held by the government in exile in the Saudi capital Riyadh over preparations for the conference.
But air strikes and deadly fighting raged throughout the country on Thursday.
Houthi spokesman Mohammed Abdul-Salam demanded on Thursday that the Saudi-led bombing stop before the group attended any talks and said they were capable of heavy retaliation, he told Arab TV channel Al Mayadeen.
"We can't accept going to negotiations and dialogue in Geneva while the aggression and shelling on our country continues," Abdul-Salam said.
"Any place we want to hit inside the Saudi enemy we will hit at a time of our choosing," he said.
The Saudi-Yemen border has in some places become a front line between the two sides, and the Houthis' Al Masira TV channel broadcast footage on Wednesday it said showed its fighters entering a Saudi border post after being fired on by Saudi tanks and helicopters.
"(Saudi) military hardware was deployed, but after a few moments they vanished, fleeing the Yemeni advance," the channel said.
Houthi media said the group had seized a border position and killed more than two dozen Saudi troops, reports flatly denied by Riyadh.
Saudi spokeman Asseri said the Houthis regularly target Saudi positions along the border and that Saudi forces respond, but he said there were no exceptional clashes on Thursday.
Arab air strikes pounded Houthi positions on Thursday, and an apparently errant bomb killed a family of six in a car near a military base in the central province of Dhamar, residents said.
Air raids and heavy ground fighting shook the central city of Taiz, another focal point of the internal war, and anti-rebel tribal sources said they made gains against the Houthis in the far northern province of al-Jawf, where the Houthis said Saudi-led air strikes killed 15 people.
Residents and local fighters opposing the Houthis said air strikes hit a southern air base controlled by the rebels and also struck their positions outside the southern city of Aden.
Tribal and militia fighters in Yemen's south support the Arab campaign and back president Hadi, who lives in exile with his government in Saudi Arabia.
IRAN SHIP TO DOCK IN DJIBOUTI
An Iranian aid ship has reached the outskirts of Djibouti's port and is waiting for a permit to enter after Tehran agreed to an international inspection of the vessel with goods for Yemen, an activist on board said, avoiding a potential regional showdown between Riyadh and Tehran.
The vessel had been escorted by Iranian warships.
Saudi-led forces have enforced inspections on vessels entering Yemeni ports to prevent arms from reaching the Houthis.
Asseri said the coalition had given the ship a choice to either unload its cargo in Djibouti for the United Nations to deliver to Yemen or submit to an inspection by the coalition if it wanted to continue on to Hodaida port. (Additional reporting by Mohammed Mukhashaf in Aden and Sami Aboudi in Dubai; Writing by Noah Browning; Editing by Louise Ireland)
Our Standards: The Thomson Reuters Trust Principles.