"I call on our brothers in neighboring countries.to stop their aggression and lift the blockade. and we will turn the page", the former president said in a televised speech.
Houthis and Saleh loyalists jointly overran Sanaa and much of the country in 2014, forcing the internationally recognized government of President Abd Rabbuh Mansour Hadi to flee to Saudi Arabia.
In a televised address, Saleh called for new relations with the Saudi-led coalition, which he and the Houthis have been battling for nearly three years (since March 2015).
Earlier, Saleh's General People's Congress (GPC) party, accused the Houthis of failing to honor the truce and said in a statement on its website that the Houthis bear responsibility for dragging the country into a civil war.
The Saudi-led coalition welcomed Saleh's change of stance.
The coalition accuses Iran of trying to expand its influence into Arab countries, including Yemen by aligning themselves with the Houthis and Mr Saleh.
"It is not unusual or surprising that Saleh turns his back on a partnership he never believed in", the group's political bureau said in a statement.
Residents of Yemen's capital, Sanaa, are used to the sounds of gunfire, but in the last four days they've had to adjust to new faultlines in the conflict. The rally came after late-night mediation attempts between Saleh and the rebels failed to reconcile both sides, sources said. There has been no official word on casualties but the International Committee of the Red Cross (ICRC) said that dozens were killed and hundreds were wounded in the fighting.
Saudi-owned Al Arabiya television said at least 80 people have been killed in this week's clashes between forces loyal to Saleh and Houthis.
He also points up that Saleh's move represents a turning point in the situation inside the country, in which the tables have been turned against the Houthis, and the situation has returned to the status-quo prior to September 2014, when the Houthis seized chunks of the capital from former president Hadi.
The Houthis' Ansarullah group, in a statement issued on its Twitter account, described the clashes as "regrettable".
Meanwhile, Houthi leader, Abdel-Malek al-Houthi, called for dialogue with Saleh and his rebel forces to end the growing violence between the two factions.
Stressing that Yemen's interests lie in avoiding sedition, the Houthi leader called on citizens and tribal fighters to focus on the battle against the invading Saudi regime and stay away from any provocative acts.