* Coalition closes in on Hodeidah airport
* Battle against Houthis is war's biggest
* Warplanes pounded city overnight, say residents
* Residents had gathered for Eid prayers
* UN urges combatants to protect civilians (Adds more quotes from residents, coalition statement)
By Mohammed Ghobari and Mohamed Mokhashef
ADEN, June 15 (Reuters) - Forces from an alliance of Arab states fought their way to the outskirts of the airport in Yemen's main port city on Friday, as the Eid holiday saw a battle the United Nations fears could trigger a famine imperilling millions of lives.
Residents in the city of Hodeidah, controlled by the Iran-aligned Houthi movement, said clashes were taking place in the Manzar neighbourhood, which abuts the wall surrounding the airport. Many Manzar residents fled to the city centre.
"There have been terrifying bombing runs since the morning, when they struck Houthi positions near the airport," said Ammar Ahmed, a fish vendor. "We live days of terror that we have never known before."
Apache attack helicopters hovered over Manzar, firing at Houthi snipers and fighters in schools and other buildings, said another Hodeidah resident, who asked not to be identified. Houthi forces had entered homes overlooking the main road to go onto the roofs. Dozens of Manzar residents fled to the city centre on motorcycles, the resident said.
Streets elsewhere in the city were empty despite the Eid holiday marking the end of the Ramadan fast. Residents instead hunkered down at home as battles raged on the edge of the city and coalition warplanes pounded coastal areas to the southeast.
The coalition of Arab states has battled with little success for three years to defeat the Houthis, who control the capital Sanaa, the main port at Hodeidah and most of Yemen's populated areas. The assault on Hodeidah is the alliance's first attempt to capture such a well-defended major city.
"We are at the edges of the airport and are working to secure it now," the Arab coalition said in a statement to Reuters. "We will soon enter the next phase of operations to press the Houthis on multiple fronts, including at coastal points, at other edges of the city and, with the local resistance, from within the city itself.
"Operational priority is to avoid civilian casualties, maintain the flow of humanitarian aid, and allow for the UN to press the Houthis to evacuate the city," it said.
The assault is a dramatic gamble by the Arab states, who insist that they can swiftly capture the port without a major disruption to aid supplies to a country already experiencing the world's most pressing humanitarian crisis.
The United Nations, which struggled but failed to find a diplomatic path to head off the assault, fears it will cut off the only lifeline for most Yemenis. Some 22 million depend on aid and 8.4 million are at immediate risk of starvation.
Western countries have long given the Arab states tacit diplomatic backing and sell them billions of dollars a year in arms. But that support could falter if the assault provokes the feared humanitarian catastrophe.
RESPECT THE LAW
"I urge all parties to the conflict to meet their obligations to protect civilians and civilian infrastructure and take active steps to respect international humanitarian law," David Beasleye, executive director of the U.N. World Food Programme, said in a statement.
Capturing Hodeidah would give the Arab coalition the upper hand in the war, in which it has fought since 2015 to restore an exiled government driven out by the Houthis. But a successful operation would require swiftly capturing a city of 600,000 people, without inflicting damage that would destroy the port.
Civilians are fleeing if they have anywhere to go, or staying and bracing for a battle.
"My family left for Sanaa yesterday but I stayed behind alone to protect our home from looters," said Mohammed Abdullah, an employee of the Houthi administration.
Riyadh and Abu Dhabi say the Houthis are a proxy force for Iran, their regional arch-rival. The Houthis, from a Shi'ite minority that ruled a thousand-year Yemeni kingdom until 1962, deny being Tehran's pawns and say they took power in a popular revolt and are defending Yemen from invasion by its neighbours.
Houthi leader Abdel-Malek al-Houthi called on his followers late on Thursday to head to the frontlines to fight the "instruments of the United States and Israel".
"The Yemeni coast has been a strategic target for the invaders throughout history and confronting the aggression is a national duty in the face of the danger of foreign occupation."
In a statement, the Houthis also reported air strikes by the Saudi-led coalition on other parts of the country, which they said killed nine civilians, including seven in a strike on Saada province in the north. Reuters could not confirm the report.
The United States rejected a request from the UAE for intelligence, mine-sweeping and air reconnaissance assets for the Hodeidah operation, a UAE official said, speaking on condition of anonymity. However, the official said France had agreed to provide mine-sweeping support. (Additional reporting by Tom Miles in Geneva Writing by Ghaida Ghantous and Peter Graff Editing by Gareth Jones)
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