Mohammed al-Qadhi, the foreign correspondent for Abu Dhabi's The National newspaper, told Al Jazeera there were reports of "tens or dozens killed and injured".
He said "they [government forces] are launching an all-out war right now and we have heard reports from Sadaa that the military is using aircraft to attack the strongholds of the fighters and many people are fleeing.
"There have been reports that the human situation is going very critical as so many people have left their houses, and this has added pressure to the camps of refugees".
There are concerns fighting in Yemen could spill over into a regional conflict.
Hussein Shobokshi, a Saudi columnist for the pan-Arab Asharq Alawsat newspaper, told Al Jazeera there were many factors for regional players to worry about.
He said the US, which has been worried about al-Qaeda activity in Yemen, "did not pay attention to what was happening in Yemen or at the same time what's developing in Somalia".
"The region as a whole is looking at a mushrooming cancer in both these countries, and things are slowly but surely getting out of hand.
"Attention by the region needs to take place immediately. The Omanis, the Saudis, the Yemenis need to put a collective effort, because there is a likelihood that a spillover effect could take place."
A statement from the Yemen's Supreme Security Committee said: "The state will strike these elements ... with an iron fist until they surrender themselves to justice."
The five-year-old battle between Yemen's Sunni-dominated government against the Shia Muslim Houthi fighters is one of a widening series of conflicts threatening to destabilise the country.
Yemen, one of the poorest Arab countries, is also combating a wave of al-Qaeda attacks and rising secessionist sentiment in the south.
Officials say the Houthi fighters, who belong to the Zaydi branch of Shia Islam, want to restore a form of clerical rule prevalent until the 1960s in Yemen when it was overthrown in a military coup.
A government committee criticised the fighters for not abiding by an agreement to end hostilities announced by Ali Abdullah al-Saleh, the Yemeni president, in July 2008.
The stability of Yemen is a crucial concern for both Saudi Arabia, which shares a border with Yemen, and the US.
Riyadh fears the conflict could make the kingdom's own Shia tribes directly across the border more restive.