The diplomatic exodus from crisis-wracked Yemen expanded Friday with Saudi Arabia joining Western nations in closing embassy operations as rebel factions cement control in the capital and al-Qaeda fighters make gains elsewhere.

The decision by Saudi Arabia reflects a major strategic step back by Yemen’s powerful neighbor, which is deeply worried over the rise of Yemen’s Shiite insurgents and the possible implications for the wider region.

Saudi Arabia and its Gulf Arab allies view the Houthi rebels as a foothold for Shiite power Iran, the main regional rival of the Western-allied Gulf rulers.

The Saudi diplomatic withdrawal underscores the concerns about instability since rebel advances last month effectively deposed Yemen’s U.S.-backed president, Abed Rabbo Mansour Hadi.

It also could limit the reach of Saudi intelligence assistance to the United States. The downfall of Hadi’s government has dealt a potential blow to Washington’s ability to wage drone attacks against targets al-Qaeda’s branch in Yemen, known of al-Qaeda on the Arabian Peninsula, or AQAP.

White House press secretary Josh Earnest said the U.S. continues to coordinate national security efforts with officials in Yemen, despite the decision to relocate embassy staff and operations there. (AP)

A statement from the official Saudi Press Agency said the country has suspended all work at its embassy in Yemen and evacuated its staff “due to the deterioration of the security and political situation.”

Hours earlier, Italy and Germany became the latest Western nations to close embassies in Yemen’s capital, Sanaa. Last week, the United States, Britain and France took similar steps.

The diplomatic flight comes amid deepening unrest across Yemen, which U.N. Secretary General Ban Ki-moon lamented “is collapsing before our eyes.”

On Thursday, AQAP overran a military base in southern Yemen in a multi-pronged assault that included car bombs and artillery, officials said. The gains appeared to show increasing disarray among Yemen’s armed forces as the country is splintered among various factions.

The Houthis oppose the Sunni-led AQAP, raising fears of direct clashes for power and territory. But the Houthi leaders also have denounced the U.S. drone attacks and are unlikely to coordinate with Washington.

The Houthis, who follow the Zaydi sect of Shiite Islam, surrounded the presidential compounds late last month in a bold power grab after months of advances from their bases in northern Yemen.

Last week, the rebel leadership announced it dissolved Parliament and appointed a hand-picked committee to run the Arab world’s most impoverished nation.

In further signs of unease, anti-Houthi protests have broken out in several parts of the country in recent days.