SANAA Presidential guards loyal to Ali Abdullah Saleh clashed with army units backing opposition groups demanding the Yemeni president's ouster on Thursday, highlighting growing tensions in the Arabian Peninsula state.
The clashes in the coastal town of Mukalla wounded one and followed the defection this week of top generals, diplomats and tribal chiefs to the side of democracy protesters who have been camped out in the capital Sanaa for some six weeks.
Army units and presidential guards -- a force headed by Saleh's son Ahmed -- had also clashed earlier this week in Mukalla, leaving one dead on each side.
Western countries and neighbouring oil giant Saudi Arabia are worried about a power vacuum if Saleh goes that could embolden al Qaeda, which has entrenched itself in the mountainous state.
"We've had a good working relationship with President Saleh. He's been an important ally in the counter-terrorism arena," U.S. Defense Secretary Robert Gates said on Wednesday. "I think we will basically just continue to watch the situation. We haven't done any post-Saleh planning," he said.
The country of 23 million faces challenges of poverty, water supply, dwindling oil reserves and lack of central government control. Northern Shi'ites have taken up arms against Saleh, and southerners dream of a separate state.
A bomb attack on a police patrol killed one in the southern city of Aden on Thursday, Al Jazeera reported, while opposition groups in Jouf and Saada in the north said that Saleh-appointed governors had quit. The reports could not be immediately confirmed.
Yemen lies on key shipping routes and borders the world's leading oil exporter Saudi Arabia. Al Qaeda has used Yemen as a base to plot attacks in both Saudi Arabia and the United States, and both countries have bet on Saleh to contain the group.
Saleh and opposition groups have both made proposals for reform. On Wednesday, Saleh offered new presidential elections by January 2012 instead of September 2013, when his term ends.
An umbrella group of civil society organisations called for a transitional council of nine figures "not involved with the corruption of the old regime" to draw up a new constitution over a six-month period ahead of elections.
But the issue of what happens to Saleh, who came power in the north in 1978 and oversaw unity with the south in 1990, was left untouched in the proposal from the 'Civil Bloc'.
Opposition parties said on Thursday they were tired of the drip-feed of concessions. "This talk is aimed at delaying the announcement of the death of the regime. The opposition does not need to respond," said spokesman Mohammed al-Sabry.
Saleh, in power since 1978, made the offer in a letter sent not only to the opposition but also to General Ali Mohsen, commander of the northwestern zone.
Mohsen said this week he was now supporting protesters in a blow to Saleh that has helped turn the tide against him. Mohsen and others defectors made their move after 52 protesters were shot dead in Sanaa last week.
SALEH'S CHOICES SEEN NARROWING
"The political tide in Yemen has turned decisively against President Ali Abdullah Saleh," an International Crisis Group report said. "His choices are limited: he can fight his own military or negotiate a rapid and dignified transfer of power."
Saleh reacted to the loss of his ally Mohsen, seen as Yemen's second most powerful figure, with a series of meetings with military and tribal leaders where he warned against a "coup" that would lead to civil war.
Saleh also has intelligence services on his side and security sources say he has beefed up his personal security for fear of an assassination attempt.
Protesters who have been encamped in their thousands outside Sanaa University for some six weeks have hardened in their attitude towards Saleh, rejecting any idea of his remaining.
They are planning a "Day of Departure" for this Friday after prayers that could bring hundreds of thousands onto the streets.
Around 10,000 people gathered on Thursday morning, chanting slogans such as "Go, go, you coward; you are an American agent".
Authorities have withdrawn the licences of Al Jazeera correspondents and ordered them to stop work, the Qatari channel said. Yemeni state media accuse the network of bias.
Protesters are divided over what they think of Mohsen, an Islamist from the same Hashed tribal confederation as Saleh who was popularly regarded as the second most powerful man in the country before he abandoned his old comrade.
"The country risks replacing the current regime with one bearing striking similarities, dominated by tribal elites from Hashed and powerful Islamists," the ICG report said.
Some protesters display the general's picture on their tents in the protest encampment in Sanaa, but opposition leaders regard his motives with suspicion and few would want him to have a role in any future transitional government.
(Writing by Andrew Hammond; Editing by Myra MacDonald)
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