Thousands of Shi’ite Muslim Houthi fighters, who control much of Yemen, held military exercises near the border with top oil exporter and Sunni power Saudi Arabia on Thursday, a Houthi commander said, adding to fears Yemen’s chaos could deepen.

The rise to power of the Iran-backed Houthis since September has deepened divisions in Yemen’s already complex web of political and religious allegiances, and left it increasingly cut off from the world.

Most foreign embassies have closed, and the World Bank said this week it had suspended its operations in Yemen, citing security concerns. […]