Saudi Arabia has suspended most of its financial aid to Yemen, Yemeni and Western sources said, in a clear indication of its dissatisfaction with the growing political power of Shi’ite Houthi fighters friendly with Riyadh’s regional rival, Iran.

Yemen, which is battling an al Qaeda insurgency, a southern secessionist movement, endemic corruption and poor governance, has often relied on its richer northern neighbor to help finance everything from government salaries to welfare payments.

But soon after Houthi fighters took over the capital Sanaa in September, Sunni Saudi Arabia promptly suspended much of that aid, concerned the rebels will use their military muscle to dominate domestic politics and project Iran’s influence. […]