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Officials have confirmed 29 people dead with hundreds severely injured.
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Two explosions struck the Al-Balili mosque as worshippers were performing prayers for the Eid al-Adha festival.
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CNN reports that the terrorist group ISIS claimed responsibility on social media for the bombing.
ISIS posted the statement on Twitter and said the bombing came as "part of a series of military operations to revenge Muslims against Houthis."
Houthi rebels are acting as the government in Yemen, having driven the internationally recognized government out of power.
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The early morning prayer service was meant to mark the beginning of Eid al-Adha, which commemorates the prophet Abraham's willingness to sacrifice his son for God. The holiday is one of two major ones in Islam.
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