SANAA Yemeni loyalist forces fought a gunbattle on Monday with opponents of entrenched President Ali Abdullah Saleh one day after he backed out of an accord for him to step down.
The clashes in Sanaa cast further dimmed prospects for a political solution to a three-month crisis in which youth-led demonstrators, inspired by protests that swept aside the leaders of Egypt and Tunisia, are demanding an end to nearly 33 years of Saleh rule.
The United States and Saudi Arabia, both targets of foiled attacks by a strong wing of al Qaeda based in Yemen, are keen to end the Yemeni stalemate and avert a spread of anarchy that could give the global militant network more room to operate.
"There is heavy gunfire and violent clashing between government forces and Sheikh (Sadiq) al-Ahmar's guards," a witness said, referring to a powerful tribal leader who has sided with the protesters.
One person was killed and 15 people were wounded, one of them a reporter of the state news agency Saba, witnesses said.
The pro-opposition Suhail television said five of Ahmar's guards were killed and 35 wounded. The report could not be independently confirmed.
The shooting, which shattered windows at Saba's offices, followed the collapse of a transition deal mediated by Gulf neighbours that Saleh was to have signed on Sunday and would have given him immunity from prosecution, ensuring a dignified exit.
The U.S. embassy closed its consular section to the public for at least two days due to a "fluid security situation", the mission said in a statement.
The government accused Ahmar's men of firing on a school and the Saba building. Ahmar's office said government forces opened fire when his guards prevented them from entering a school where Ahmar said loyalists were stockpiling weapons.
South of the capital, loyalist gunmen opened fire on the headquarters of the Islamist party Islah, the biggest member of Yemen's opposition coalition, in the city of Ibb.
Saleh has backed out of previous deals aimed at easing him out of power, but Sunday's turnabout appeared to be among the most forceful, coming after loyalist gunmen trapped Western and Arab diplomats in the United Arab Emirates embassy for hours.
Inside were the head of the Gulf Cooperation Council, Abdullatif al-Zayani, who has spearheaded mediation efforts, and the U.S. and several European ambassadors. The mediators were effectively blocked from heading to the presidential palace where the now failed deal was to be signed.
They had to later be flown out by helicopter. Gulf neighbours subsequently withdrew their trouble-shooting initiative, citing a "lack of suitable conditions".
APOLOGIES TO UAE
Saleh apologised to the UAE on Monday. But foreign governments piled criticism on him over his refusal to sign.
"President Saleh is now the only party that refuses to match actions to words," U.S. Secretary of State Hillary Clinton said late on Sunday.
"We urge him to immediately follow through on his repeated commitments to peacefully and orderly transfer power and ensure the legitimate will of the Yemeni people is addressed. The time for action is now," she said.
A Yemeni foreign ministry official rejected her criticism and said: "The initiative is an internal Yemeni issue and Yemen does not accept solutions imposed from outside or interference in its internal affairs," the ruling party website reported.
The European Union berated Saleh for refusing to sign the deal, saying member states would review their policies towards Yemen. France accused him of being "irresponsible".
Saleh, playing on Western fears of chaos, blamed the opposition for the deal's collapse and warned that if a civil war erupted "they will be responsible for it and the bloodshed".
Dubai-based security analyst Theodore Karasik said of Sunday's events: "The region as well as the U.S. are going to be still pretty upset with what happened. So I don't think that is going to be forgiven and it makes Saleh look less trustworthy.
"It is part of the downward spiral that Saleh has created for himself. It appears he has no intention of leaving, and he keeps stalling. This whole episode makes it more clear that he is not serious," said Karasik.
A Yemeni presidential source described Sunday's embassy incident as "irresponsible and unacceptable" but said the UAE ambassador was not a target, without mentioning the other diplomats involved.
Ahmed Sufan, a former deputy prime minister who has been involved in transition talks, resigned from the ruling party in protest at the incident.