It's definitely a bad situation. You've got Saudi Arabia (+Allies) and the Yemen government fighting Iranian backed rebels. Meanwhile you also have Al-Qaeda and a small group of Islamic State just waiting for the chance to stir the pot further. There are a lot of ways this situation could go to hell fast.
Question is: What should be done to stop this from escalating further?
IS won't develop a foothold there and within 12 months will be all but gone as any sort of real threat worldwide (outside of the occasional bombing all terrorist groups carry out)
AQAP are a powerful group but with Saudi Arabia involved in a military capacity I see them being able to do little.
America almost certainly won't get involved and if they for some reason do it would obviously be on the side of the Saudi's and the government of Hadi. I don't see that happening though.
Overall I see this just furthering the plan to turn the country into 6 separate semi autonomous states (I think it's six but may be wrong) since no one is going to beat the Saudi's militarily and they won't back down to the Iranians.
what should happen is... actually IS is hard to fight, in the same way that you can't just get all of MI6 on a battlefield and blow them up, stab them or shoot them to death. IS has only 30,000 men (apparently) but they use it very effectively
I'm sorry Thomas but that is a terrible comparison.
IS will have lost all their gains in Iraq by the end of the year. Best case for them is that the battle for Mosul will still be ongoing. The problem in defeating them fully will be their territory in Syria ajnd unless Libya gets sorted they may have a foothold there. Sadly I feel the Syrian conflict will end in Bashir's side winning.
The Western coalition is happy to bomb IS targets in Syria now, but once they are driven out of Iraq I feel this will change. Bashir has the support of Hezbollah directly and Iran indirectly, this will be enough to defeat IS and from there the like of Al Nusra, the FSA etc.
The only way the above will end differently, in my mind, is if Western nations decided to get as involved in Syria as they did Libya, and we all know how well that's ended.