N officials told Reuters it may undermine peace efforts.

Humanitarian agencies say it will complicate relief, and it may also box in the incoming Biden administration.

The Houthis control much of northern Yemen, and aid agencies have toe work with them to deliver assistance.

The terrorist designation comes with sanctions against the Houthis.

Scott Paul is with the humanitarian NGO Oxfam.

I'm scared for my friends and colleagues in Yemen because the country is going to enter even more difficult chapter.

Um under the best case scenario now, President elect Biden will come in and on day, one hour, one minute, one revoke these designations.

Even under that scenario, the message will have been sent out to the businesses and banks working with Yemeni companies and Yemeni markets all over the world, and it will spook them.

And Yemen's markets can't afford to be spooked.

On the streets of Sana, where pictures of Houthi leaders line buildings, the reaction from residents was also spooked.

Local journalists named Ahmed Ali told us that he believes the US decision won't affect the Houthis themselves but will affect anyone relying on humanitarian aid.

Secretary of State Mike Pompeo has said that measures will be implemented to reduce that impact.

The Saudi government is lauding the move.

Saudi Arabia's military coalition has long fought the Houthis, who have hit the Saudi homeland with missile and drone strikes.

The Houthis are also aligned with Iran, and in recent weeks the Trump administration has piled on MAWR and Mawr sanctions related to Iran, seen by many analysts as an effort to make it harder for a Biden White House to reengage with Iran's leaders.

The new terrorist designation for the Houthis won't take effect until January 19th, one day before Biden was sworn in and could face many political obstacles to undo.