A Yemeni health official and the International Committee of the Red Cross said than an air strike had hit the bus carrying children as it drove through a market in northern Saada province.
The coalition said it had carried out what it called "legitimate military action" in the area targeting Houthi rebels.
A Saudi-led coalition launched heavy air strikes on Yemen's main port city of Hodeidah on Friday, in an apparent resumption of military operations on the city after the Iranian-aligned Houthi movement attacked two Saudi oil tankers, residents said.
Forces backed by a Saudi-led coalition have killed eight members of Lebanon's Hezbollah group in Yemen in battles with the Iran-aligned Houthis, the coalition said on Monday.
Arab coalition troops stormed the airport in Yemen's main port Hodeidah on Tuesday and captured large areas of the compound in battles with Iran-aligned Houthis, a Yemeni military source, the UAE news agency and local residents said.
Yemen's Iran-aligned Houthi movement fought on Saturday to keep a Saudi-led coalition from taking full control of the airport in the port city of Hodeidah, in an offensive the UN says could trigger a famine imperilling millions of lives.
A Yemeni rebel attack killed 12 soldiers south of the battleground Red Sea port city of Hodeida on Friday, military and medical sources said.
A Saudi-led alliance of Arab states launched an attack on Yemen's main port city on Wednesday in the largest battle of the war, aiming to bring the ruling Houthi movement to its knees at the risk of worsening the world's biggest humanitarian crisis.
Residents and medics told Reuters that 20 people attending the celebration were killed and at least 30 injured.