"The national security council announces a state of emergency across Yemen," Saleh told reporters.
Witnesses said pro-Saleh "thugs" opened fire on protesters from rooftops near the square at Sanaa University, where demonstrators calling for the fall of the president have been encamped since February 21.
An AFP correspondent later saw police firing at protesters as well.
Medics said that at least 41 people were killed and scores more wounded in the bloodbath. (*)