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Secretary of State Mike Pompeo has designated Yemen's Houthi rebel group as a Foreign Terrorist Organization despite warnings that such a move will exacerbate Yemen's humanitarian crisis and make peace harder to achieve.

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Why it matters: The Houthis ousted the Yemeni government in 2014 and still control large swathes of the country after six years of war with a Saudi-led coalition. The people of Yemen are facing what the UN calls the world's worst humanitarian disaster, with 80% of the population lacking sufficient food or clean water, and millions on the brink of famine.

Driving the news: The U.S. is a major source of humanitarian aid to Yemen, but has cut back in the last year after accusing the Houthis of interfering with aid disbursement. That move has slowed the flow of medicines and supplies, the Washington Post reports.

• The terror designation will make it difficult for aid groups operating in Houthi-controlled areas — where most Yemenis live — because it will criminalize alleged cooperation with the group.
• David Miliband, President and CEO of the International Rescue Committee, called the move "pure diplomatic vandalism" and said it would make the urgent work from groups like his that operate in Yemen "all but impossible."
• "After four years of a failed war strategy that has created the world’s largest humanitarian catastrophe, the last thing the Yemeni people need is further interruption of aid and economic flows," Miliband said in a statement provided to Axios.

The State Department acknowledged those concerns in its statement about the designations, saying it was "planning to put in place measures to reduce their impact on certain humanitarian activity and imports into Yemen."

• The designation will also make it more difficult to conduct diplomacy with the Houthis as part of the ongoing peace process in Yemen, the International Crisis Group contends.

The other side: For Pompeo, this appear to be less about Yemen than about Iran, the main patron of the Houthis.

• The Trump administration considers the Houthis a proxy for Iranian influence, and sees Monday's announcement as part of the "maximum pressure" strategy on Iran — a strategy that the administration has attempted to make it difficult for President-elect Biden to deviate from.

What to watch: The Trump administration has resisted efforts from Congressional Democrats to end U.S. support for the Saudi and Emirati bombing campaign in Yemen, but Biden said during the campaign that he would withdraw support.