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BEIRUT (Reuters) - Yemen's President Ali Abdullah Saleh is clinging to power despite daily protests demanding his departure. Implausibly, he may still believe he can survive.
Handing out funds and favours, the 69-year-old leader of the poorest Arab country has skillfully juggled complex military, tribal and political networks to stay in office for 32 years.
But more than two months ago, young Yemenis inspired by popular revolts in Egypt and Tunisia began demanding Saleh's removal, blaming him for rampant corruption and mismanagement of an aid-dependent economy overwhelmed by rapid population growth, fast-shrinking oil reserves and an apocalyptic water crisis.
Many army officers, tribal sheikhs, clerics and ruling party politicians have defected to the opposition. Pro- and anti-Saleh military units face off in the capital, Sanaa, where one soldier from each side was killed in a gunbattle on Wednesday.
Saleh can no longer count on support from his U.S. and Saudi allies, who had seen him as an ally against a Yemen-based arm of al Qaeda. Saudi Arabia and its partners in the Gulf Cooperation Council (GCC) called this week for a transfer of power in Yemen.
Yet the resilient president, whose blood relatives control key security posts, still resists pressure for his swift exit.
"My reading of Saleh's tactics is that every day that he is able to cling to power is another day he can try to undermine those who have defected and the formal opposition, all the while underlining his argument that Yemen will collapse into anarchy without him," said Sarah Phillips, of Sydney University.
"Some Yemenis, particularly those who are highly vulnerable to small fluctuations in local markets, may still prefer the status quo to the promise of prolonged unrest," she said, adding that Saleh was probably trying to exacerbate this fear.
"However, I suspect that the longer he tries this, the more animosity he will create," the Yemen researcher said.
Apart from evoking the spectre of civil war or open-ended chaos to terrify waverers, the president can also draw on money, guns and political agility from his depleted survival kit.
"Saleh still has unfettered access to the treasury; he has the Republican Guards, the air force, the Central Security, the ruling party which, with enough money and propaganda of fear of the unknown, can mobilise hundreds of thousands of supporters," said Yemeni political analyst Abdul-Ghani al-Iryani.
The most senior military defector is General Ali Mohsin, who has deployed his 1st Armoured Division to protect protesters in Sanaa. The powerful general, who denies seeking the presidency himself, is seen as a potential kingmaker in a post-Saleh era.
"He has been tied to some of Yemen's biggest corruption scandals of recent years and has very substantial business interests," wrote Zaineb al-Assam, of London-based consultancy Exclusive Analysis.
"He is a major player in the energy sector, both in terms of his involvement in major oil deals and as a beneficiary of lucrative diesel smuggling operations."
Yet Saleh has turned even the loss of one of his closest lieutenants to his advantage, Iryani said, enabling him to cast the youth revolution as a conspiracy by Mohsin, the Islamist opposition Islah party and its tribal allies.
At least 116 protesters have been killed in demonstrations that have convulsed Yemen since Feb. 11, echoing the wider popular unrest that has swept the Arab world this year.
Anti-Saleh sentiment is shared by many on a political and tribal landscape fragmented by secessionist discontent in the south, an intermittent revolt in the north and attacks by al Qaeda militants prowling Yemen's under-governed spaces.
Saleh, who had portrayed himself to worried Western donors as their man to fight al Qaeda, may now be seen by them and by Yemen's Gulf neighbours as a liability. The GCC has asked Saleh and his opponents to join talks, which may begin as early as Saturday, to agree on a transition to avert an armed showdown.
The president will certainly seek the most favourable deal for himself and powerful family members who are likely to want to keep their wealth and secure immunity from prosecution.
Saleh, mindful of the court case now faced by Egypt's toppled President Hosni Mubarak, has no desire to step down only to face arrest and prison, said Yemen scholar Gregory Johnsen.
It is unclear how long the standoff will last, but "the longer it does go on, the worse Yemen's economy and the security situation will become. And both of these should motivate outside parties to lend support to a speedy transition," Johnsen said.
The United States, European Union and the GCC all understood the stakes, but had yet to find a transition mechanism, he said, citing conflicting Yemeni responses to the GCC initiative.
Saleh, whose legal term expires in 2013, may be angling for more than immunity for himself and his entourage -- an idea accepted by opposition parties but not the youthful protesters.
"He also wants to restructure the armed forces and to have a say in who in the GPC (ruling party) would get portfolios in the national unity government," Iryani said.
"Above all I think he's still hoping for a change of fortune that will allow him to wiggle out of this and remain in power."