The battle for Hodeida, which provides a crucial lifeline for the 14 million Yemenis - half the country's population - now at risk of starvation, has become the war's epicentre.
The decision was announced by Saudi Arabia on Saturday and confirmed by the United States, coming at a time of mounting global outcry over the high number of civilian casualties and the murder of Jamal Khoshoggi.
In January 2016, Saudi Arabia said the USA and United Kingdom military advisers were in the command and control center for strikes on Yemen and had access to lists of targets.
The action comes amid growing congressional anger against Saudi Arabia, a key ally and the country where President Donald Trump made his first visit overseas after taking office. Turkey says Khashoggi was strangled and dismembered at the consulate in Istanbul by a 15-member assassination squad, including agents close to the prince. And with the election handing control of the U.S. House to the Democrats, it becomes more likely that some retaliation against Saudi Arabia would gain traction on Capitol Hill. The Post first reported the Trump administration's desire to end the refuelling.
US officials, speaking on condition of anonymity Friday to discuss the decision before its announcement, said the end to refuelling wouldn't stop American training and military assistance.
USA officials told Reuters only a fifth of Saudi-led coalition aircraft require in-air refuelling from the United States.
"We have one clear demand and that is a complete halt to Saudi airstrikes", said one Houthi official who spoke to The Associated Press on Saturday on condition of anonymity because he was not authorized to brief the media.
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However, a halt to refuelling could have little practical effect on the conflict, seen as a proxy war between Saudi Arabia and Iran.
The United States, France and Britain - all veto-wielding council members - support the coalition in its campaign, launched in 2015, to restore the internationally-recognized government in Yemen but the heavy civilian toll has raised concerns.
The coalition has come under heavy criticism for its relentless airstrikes since 2015, which United Nations experts say have caused the majority of the estimated 10,000 civilian deaths in the conflict and could constitute a war crime. Mattis said the United States would play a continuing role to help the Saudi-led coalition and Yemeni forces minimize civilian casualties and expand humanitarian efforts. It said that the coalition, which relies heavily on air power, has killed scores of civilians in recent airstrikes, and rebels are responding with mortars in residential neighbourhoods that cause indiscriminate casualties.
Earlier this year, Defense Secretary Jim Mattis defended USA military support to Saudi-led coalition forces in Yemen, when lawmakers weighed forcing the Pentagon to end Washington's involvement in the conflict.
In the last month, the UAE has mounted an all-out offensive to capture the critical Yemeni port of Hodeida.
The pullout from refuelling comes amid new American efforts to force an end to a conflict described as the world's worst humanitarian crisis.
According to experts, more than 22 million people in are in desperate need in what is already the Arab world's poorest country. Other groups have estimated that more than 10,000 have been killed - excluding over 2,300 cholera deaths since April 2017 amid pitiful water supplies.