A loyalist official said mortar rounds were "falling like rain" in the streets as troops weathered rebel-laid mines and snipers to take control of the main hospital in the city of some 600,000 people.
The rebels have put up fierce resistance to the loyalist advance towards the city's vital docks, which are the point of entry for 80 percent of Yemen's commercial imports and nearly all UN-supervised humanitarian aid.
The suspension of US assistance to re-fuel coalition aircraft comes as Washington's backing of the war effort faces increased scrutiny following international outrage over journalist Jamal Khashoggi's murder last month in the Saudi consulate in Istanbul.
US Democrats, buoyed by victories in this week's midterm elections, have sought to curtail Washington's military support to Saudi Arabia and demanded greater oversight of a conflict the UN has labelled the world's worst humanitarian crisis.
The grinding Saudi-led war in Yemen has caused growing international unease after high-profile coalition air strikes that have killed scores of civilians, many of them children.
The intensified coalition-backed push into Hodeidah, which has claimed the lives of 382 combatants this month, comes despite aid agency warnings of a humanitarian catastrophe in the event of a protracted battle for the city.
Some 14 million Yemenis are at risk of famine and many more are dependent on international aid, according to UN agency figures, making it vital that Hodeidah's port remains open and undamaged.
Yemeni officials said Saturday that pro-government forces had captured the May 22 Hospital.
Amnesty International had accused the Houthis of "deliberate militarisation" of the facility after they posted snipers on its roof.
Two days after loyalist troops entered residential neighbourhoods of Hodeidah for the first time, fierce battles raged in the city's east as loyalist forces backed by air strikes and helicopters sought to push deeper into the city.
"The battles here are turning into street fighting," one loyalist official said, adding that pro-government forces had advanced around a kilometre along a major highway into the city on Saturday.
Hodeidah resident Lubna, who asked not to be fully named for fear of repercussions, said "the noise of Apache helicopters, artillery and gunfire" was incessant.
Houthi forces were using artillery to pound advancing loyalist forces, at times firing from residential areas, she said, fearing this "could mean that civilians pay the highest price."
"This attack is more intense than the previous on (in June) but a lot of residents are refusing to leave," she said.
"I don't know whether it's because they're hoping things will improve or it's just an expression of despair."
'Worst time for children'
Save the Children field coordinator Mariam Aldogani spoke of intense coalition air strikes.
"In the last 30 minutes there were more than 15 air strikes... This is the worst time for Hodeidah children," she said.
In an apparent face-saving move, Saudi Arabia sought to project the decision to end in-flight refuelling as its own, not Washington's.
The Pentagon had been providing refuelling capabilities for about 20 percent of coalition planes flying sorties over Yemen.
Saudi-controlled media suggested the coalition had the capacity to make up the shortfall.
Saudi-owned Al-Arabiya Al-Hadath television reported that the kingdom has 23 planes of its own for refuelling operations devoted to Yemen operations, while the UAE has six.
But analysts said the US move would limit the coalition's ability to conduct bombing missions.
Andreas Krieg, a professor at the School of Security Studies at King's College in London, said the decision was "significant" as refuelling had been Washington's most important operational role in the war.
"The coalition has their own refuelling capability in theory, but air-to-air refuelling is a demanding exercise that neither Saudi Arabia nor the UAE can do as efficiently," he said.
Loyalist commander Colonel Sadiq Duwaid said the decision would "not affect" the coalition assault on Hodeidah, which would continue "until the Houthi militias surrender".
'Nothing but empty talk'
The intensified battle for Hodeidah comes despite Pentagon chief James Mattis calling last month for a ceasefire and negotiations between Yemen's warring parties within 30 days.
The United Nations has since pushed that deadline back to the end of the year.
In an op-ed published by The Washington Post on Friday, the head of the rebels' Supreme Revolutionary Committee, Mohammed Ali al-Houthi, said the escalating offensive in Hodeidah showed Mattis's ceasefire call was "nothing but empty talk".
"The recent statements are trying to mislead the world... The United States has the clout to bring an end to the conflict -- but it has decided to protect a corrupt ally," Houthi wrote.
The article infuriated Yemeni government officials, who accused the Post of providing a platform to a "war criminal".
The Houthis have controlled Hodeidah since 2014 when they overran the capital Sanaa and swept though much of the rest of the country, triggering the Saudi-led intervention the following year.
The rebels have since been driven out of virtually all of the south and much of the Red Sea coast.
