The meeting is set to last a week in the picturesque town of Rimbo – 35 miles north of Stockholm – with UN sources saying they are hoping for “confidence-building measures” rather than a breakthrough.
The prison exchange, to be overseen by the International Committee of the Red Cross, was seen as an encouraging start to the talks. The Red Cross said about 5,000 people would be freed.
At least 10,000 people have been killed in the war – though observers believe the number could be much higher – and Save the Children estimates 85,000 children under five may have starved to death.
The UN has called it the world’s worst humanitarian crisis and that 14 million people are in danger of famine because of an aid blockade.
The UN’s special envoy for Yemen, Martin Griffiths, said that even just getting the warring sides to the table was an important milestone.
“During the coming days we will have a critical opportunity to give momentum to the peace process,” he said as the rival delegations arrived in Sweden.
However, he cautioned that the talks were “consultations” and “not yet beginning the process of negotiations”.
Sweden’s foreign minister, Margot Wallstrom, welcomed the two sides as they sat in the same room at Rimbo’s Johannesberg Castle and urged them to find “compromise and courage”.
“Now it is up to you, the Yemini parties,” she said. “You have the command of your future.”
Ahead of the talks, a top Houthi official threatened to stop UN planes using the capital’s airport unless the negotiations allowed for its full reopening.
Yemeni government officials hit back by demanding rebels disarm and pull out of the Red Sea port city of Hodeida.
The foreign ministry tweeted a demand that the “coupist militias withdraw fully from the western coast and hand the area over to the legitimate government”.
The Saudi-led coalition – which backs the government – has been laying siege to Hodeida for months, with civilians caught in the crossfire.
The coalition intervened in 2015 to restore a government ousted by the Iran-aligned Houthi movement.
Pressure to end the war has intensified amid dire humanitarian warnings and the Jamal Khashoggi murder, which has focussed attention on Saudi government actions.
A Yemeni government source told Reuters they wanted maps of where rebels have planted landmines.
Sources on both sides said they would demand a ceasefire and the opening of humanitarian corridors.
Mr Griffiths said he believes the talks can “bring good news for Hodeida and for the people of Yemen”.
“We have been working to reach a negotiated agreement to spare both the city and port the threat of destruction, and guarantee the full operation of the port,” he wrote in The New York Times.
The coalition also allowed the Houthis to evacuate 50 wounded rebels for treatment in Oman.
Saudi Arabia and the coalition it leads first intervened in Yemen in 2015, with the aim of restoring its internationally-recognised government that had been ousted from the capital of Sana’a the year before.
They are widely seen as having got involved because of the rebels’ ties to regional rival Iran.
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