There was no way to independently verify the reports, but this was the second reported air raid against civilians in three days in the conflict-ridden northern area.
The Red Cross has registered some 30,000 civilians displaced in the latest round of fighting which broke out in Saada and Amran provinces last month, the latest flare up of a five-year-old conflict.
Most have taken refuge in major cities, but some are stranded in more remote areas.
Local aid workers and tribal residents in the area said the air raid came around noon and they reported seeing body parts flying in the air and pools of blood in the barren mountainous region where hundreds of the displaced had taken refuge.
Mohammed, a local aid worker working with the displaced, told The Associated Press news agency that he saw missiles hit the area, prompting people to run for cover under a nearby overpass that was then also struck.
"The area turned into a pool of blood. I saw body parts and charred bodies,'' Ali, another local aid worker, said.
A third witness, local resident Yehia, said the ambulances arrived in the area hours after the raid.
The attack followed a statement on Monday by the fighters that Yemeni jets dropped two bombs on a local market in the northern town of Saada, killing dozens of civilians.
The fighting has continued unabated despite pleas from aid groups to end the hostilities and allow aid to reach civilians.
On Wednesday, the Yemeni defence ministry said its forces killed some 33 rebels in 24 hours.
The rebels, meanwhile, claimed that they have seized control of a number of military posts near the border with Saudi Arabia.