Even so, the two sides agreed to meet again in the presence of UN envoy Jamal Benomar, who has been in Sanaa since yesterday, in a renewed effort to clinch an agreement, the diplomat said.
Zaidi rebels have been camped out in the capital for weeks, demanding the resignation of the government, which they accuse of corruption, and a reduction of fuel prices.
Yesterday sources from both sides said a potential deal had been reached to end the stalemate.
Another source in President Abdrabuh Mansur Hadi's office said it was an "understanding over an agreement that will be finalised by Benomar."
Talks to fine-tune the deal were held late yesterday and into the night between government representatives led by presidential adviser Abdelkarim al-Ariani and Mehdi Machchat for the rebels.
A source close to the talks said "progress has been achieved" and that discussions focused on a new premier and cutting fuel prices.
Authorities want the rebels to dismantle protest camps in Sanaa as part of a deal to resolve the crisis.
"The regime wants the camps dismantled as soon as a new prime minister is named, but we will do this after a new government is formed," a rebel official told AFP.
The rebels have battled the government for years from their Saada heartland in the remote north, complaining of marginalisation under former president Ali Abdullah Saleh.
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