Hardline women are forcing teenage boys to take wives so they can have children, raise them on ISIS ideology and send them off to restore the group's so-called caliphate.
Fuelled by the Houthis, the crisis in Yemen has led to more than 17,500 civilians killed and injured, and 10 million are at risk of famine.
Threats reported at a high-level security meeting sparked tensions in a country where past assassinations have been linked to Hizbullah.
The Iran-backed group's self-described goal is to depose the Bahraini government and pave the way for Iran to exert greater influence in Bahrain.
Further use of such rockets on US forces or its allies in the region will have devastating consequences, military sources say, following another attack on the US embassy in Baghdad.
The move comes after concerns that the paramilitary group might turn those weapons on Hizbullah.
Displaced residents have returned to find ISIS had taken over their homes, used them as hideouts and then booby-trapped them.
The sanctions come at a time when Hassan Eyrlou is being tried by the military court in Marib on charged of espionage and participating in hostile actions against the Yemen National Army.
Dozens of journalists have been killed, the majority by the Houthis, as the warring parties target media outlets in areas under their control.
Yemeni officials say that al-Qaeda has exploited delays in the implementation of the Riyadh power sharing agreement to carry out attacks.