"The Houthis targeted the neighbourhood of al-Mujama near the Athban mosque in the centre of the city with a Katyusha missile in the early hours of Tuesday, killing seven civilians and wounding at least 25", said Khalil al Zikri, from the Yemen army's moral guidance department.
Actions by the Revolutionary Guards "have enabled the Houthis to launch missiles at Saudi cities and oil infrastructure", said Treasury Secretary Steve Mnuchin in a statement.
Mnuchin added, "The United States will not tolerate Iranian support for Huthi rebels who are attacking our close partner, Saudi Arabia".
The U.S. Treasury Department said in a statement that Mehdi Azarpisheh, Mohammad Jafari, Mahmud Kazemabad, Javad Shir Amin, and Sayyed Mohammad Tehrani are the people being sanctioned.
Houthi rebels have fired ballistic missiles into the Saudi capital of Riyadh several times over the past few months.
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They should continue buying Iranian oil and should, if necessary, also buy Iranian oil the United States decides not to buy. "We know there are hardly any larger companies in Europe that do not also trade with the United States".
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Saudi Arabia, along with allies including the United Arab Emirates, intervened militarily in Yemen in 2015 in a bid to force out the rebels and restore what they see as the legitimate government.
A week ago, the US Treasury has sanctioned six individuals, including Valiollah Seif, the head of Iran's central bank, over alleged ties to the Islamic Revolutionary Guard Corps (IRGC) and the Hezbollah movement, which Washington considers to be a terrorist group. Riyadh and the USA have accused Iran of supplying the Houthis with those missiles.
The sanction followed United States punishment of Iran for alleged "abuse" of the global financial systems.
Since US President Donald Trump announced his decision to exit the historic Iran nuke deal, the US Treasury has launched several sanctions against Iran.