More than 50 civilians were also wounded in the strike in Fayoush, a suburb just north of the southern port city of Aden, the officials said, speaking on condition of anonymity because they were not authorised to release the information otherwise.
"I came right after the explosion and saw dozens of dead strewn about and a sea of blood, while the wounded were being evacuated to nearby hospitals," resident Abu-Ali al-Azibi said. "(There was) blood from people mixed with that of the sheep and other livestock at the market."
The fighting in Yemen pits the Houthis and troops loyal to former President Ali Abdullah Saleh against southern separatists, local and tribal militias, Sunni Islamic militants and loyalists of President Abed Rabbo Mansour Hadi, who is now based in Saudi Arabia.
The rebels seized the capital, Sanaa, in September. In March, a Saudi-led and US-backed coalition began launching airstrikes against the rebels and their allies.
Last Wednesday, it declared its highest-level humanitarian emergency in the country, where over 80 per cent of the population needs assistance.
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