* Fighting reported on coastal link close to Hodeidah
* U.N. seeking to avoid assault on Yemeni port city
* Fears that clashes could worsen humanitarian crisis (Adds MSF comment)
By Mohammed Ghobari
ADEN, June 24 (Reuters) - Yemen's Houthis deployed additional forces in the main port city of Hodeidah on Sunday as a Saudi-led military coalition moved closer to the city centre in the largest offensive of the war, raising U.N. fears of a humanitarian catastrophe.
The alliance led by Saudi Arabia and the United Arab Emirates launched its assault on the heavily defended Red Sea city on June 12 to try to weaken the Iran-aligned Houthi movement by cutting off a key supply line for the group which controls the capital Sanaa and most populated areas.
"There is a heavy deployment of armed Houthis in the city and new check points have been set up in neighbourhoods where there are supporters of the Tehama brigades," said one resident, referring to a Yemeni faction from the Red Sea coastal plain that is fighting with coalition forces.
Fierce clashes broke out after midnight near Hodeidah University, around 3 km (1.9 miles) west of the city centre, on the coastal road linking the airport to the port, added the resident, who requested anonymity.
Coalition forces seized the airport on Wednesday and have been consolidating their hold in the area as U.N. efforts continued to reach a political deal that would avert an assault on the port, a lifeline for millions of Yemenis.
The United Nations fears the escalation in fighting could exacerbate what is already the world's most urgent humanitarian crisis, with 22 million Yemenis dependent on aid and an estimated 8.4 million believed to be on the verge of starvation.
The fighting has wounded and displaced civilians.
Medical charity Medecins Sans Frontieres (MSF) said it had received 151 injured people in recent days in Al Thawrah Hospital, the main public medical facility serving Hodeidah, and expects to receive more as the fighting moves towards the city.
"There are 86 beds in Al Thawrah and we desperately need more...We hope to set up a field hospital with 20 beds in the next two weeks," Caroline Seguin, MSF program manager for Yemen, told Reuters by telephone from the UAE.
The Western-backed coalition intervened in Yemen in 2015 to restore the internationally recognised government in exile, but since then neither side has made much progress in the war, widely seen as a proxy conflict between Saudi Arabia and Iran.
The World Food Program said the fighting could result in up to 1.1 million people being either displaced or trapped within the city and in need of emergency food assistance.
U.N. envoy Martin Griffiths has visited Sanaa and Saudi Arabia to try to negotiate a solution.
The Houthis have indicated they would be willing to hand over management of the port to the United Nations, sources told Reuters. A U.S. official said Washington was urging the Saudis and Emiratis to accept the deal.
"The coalition will achieve its goal of liberating Hodeidah, city & port. Yet we will support all efforts to achieve an unconditional peaceful withdrawal of Houthi gangs," UAE Minister of State for Foreign Affairs Anwar Gargash said in a Twitter post on Saturday.
The Arab states say they must recapture Hodeidah to deprive the Houthis of their main source of income and prevent them from smuggling in Iranian-made missiles, which have been launched at Saudi cities. The group and Tehran deny the accusations.
The coalition has pledged a swift military operation to take over the airport and seaport without entering the city centre, to minimise civilian casualties and maintain the flow of goods.
"The battle for Hodeidah is reaching the point of no return," the International Crisis Group said in a conflict alert.
"This is the final, fragile moment in which it may still be possible for UN-led negotiations to prevent a destructive fight that is likely to exacerbate dire humanitarian conditions and further delay broader negotiations to end the war." (Additional reporting by Ghaida Ghantous and Naweid Jabarkhyl in Dubai; Editing by Keith Weir)
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