Gunmen from both groups in a strained civil war alliance withdrew from streets in the Yemeni capital on Sunday after trading fire in unprecedented violence, officials from the two groups said.
The clash late on Saturday between Houthi rebels and loyalists of a powerful former president killed at least three combatants and marked a breakdown within the main political gathering confronting a Saudi-led military coalition in Yemen's 2 1/2-year-old war.
"The situation has been contained and armed men have been withdrawn. A commission to investigate the incident has been formed," a Houthi official told Reuters.
Residents of the upscale Hadda district where the fighting raged for several hours said traffic was picking up as people began morning commutes to work.
The two fighting groups together rule northern Yemen and have maintained an uneasy alliance throughout the largely stalemated conflict that has killed at least 10,000 people and unleashed hunger and disease.
Ali Abdullah Saleh ran Yemen for 34 years, and a mass rally to commemorate his former ruling party's anniversary last week aroused the ire of the Houthis, who viewed it as a show of force meant to undermine them.
The tensions boiled over on Saturday night when Houthi fighters set up a security checkpoint near the home of Saleh's son and his media office.
Two Houthi fighters were killed and Yemeni media reported that an army colonel who served as a senior official in Saleh's General People's Congress (GPC) party also died.
Houthi-run state news agency Saba reported that neutral forces intervened to stop the fighting and that an investigation had been launched.
A GPC official said forces on both sides were leaving the area after the Houthi checkpoint was dismantled.
Houthi and Saleh forces fight side-by-side in nationwide battlefronts against the country's internationally recognized government, which is backed by the Saudi-led coalition.
It intervened in Yemen's civil war in 2015 to restore the government to Sanaa after the Houthis seized it and entered into their alliance with Saleh.