"The death toll has gone up to 17," said Sadeq al-Shujaa, head of a makeshift field hospital at a square in central Taez after security forces opened fire on demonstrators marching on the local governorate headquarters.
Witnesses said the demonstrators stormed the courtyard of the governorate and that plainclothes gunmen and rooftop snipers also took part in the gunfire to push them back.
The bloodshed, a day after another protester was shot dead in Taez, 200 kilometres (125 miles) from the capital, sent the death toll to more than 100 in a crackdown on protests in the impoverished state since late January.
With the rising death toll, Saleh, a longtime US ally in Washington`s fight against Al-Qaeda, appears to be losing American support.
The US government is taking part in efforts to negotiate the president`s departure and a transitional handover of power, according to a report in the New York Times on Sunday.
US officials have told allies they see Saleh`s position as untenable due to the widespread protests, and believe he should leave office, it said. Talks on his departure had been underway for more than a week.
The talks centred on a proposal for Saleh to hand over to a provisional government under his vice-president until new polls. The principle is "not in dispute", an unnamed Yemeni official told the paper.
With the timing still to be worked out, the focus for Washington remains on keeping its Saleh-backed counter-terrorism operation in Yemen on track, the Times reported.
The Common Forum, an opposition coalition, on Saturday offered its "vision for a peaceful and secure transition of power", calling on Saleh to hand power to Vice-President Abdrabuh Mansur Hadi to head a caretaker regime.
But the president, who has adopted a defiant tone over the past week, on Sunday told the opposition to end protests and remove roadblocks, offering a "peaceful transition of power through constitutional ways".
Youth protesters staging sit-in protests, however, said they would accept nothing short of an end to Saleh`s autocratic rule along with the departure of top figures in his regime.
Oil-rich Gulf states also said late on Sunday that they are seeking to mediate between Saleh and the opposition.
"The countries of the Gulf Cooperation Council have agreed to begin contacts with the Yemeni government and opposition with ideas to overcome the current situation," it said after a meeting of foreign ministers in Riyadh.
On the ground in Sanaa, soldiers from units whose commanders have sided with protesters intervened on Monday to prevent about 200 police from taking on thousands of demonstrators camped since February at a square in central Sanaa.
In the western city of Hudaydah, witnesses said dozens of people were wounded by police gunfire and rocks, while hundreds of others needed treatment for tear-gas inhalation.
Thirteen people were shot and wounded in Hudaydah late on Sunday, witnesses said, as police clashed with thousands of demonstrators marching on the Red Sea city`s main local government building.
The demonstrations in Taez and Hudaydah form part of a renewed spurt of protests for Saleh to end his three-decade rule.
The tide appeared to turn against Saleh on March 18 when regime loyalists gunned down 52 demonstrators in Sanaa, sparking widespread condemnation abroad and a string of defections from his camp.
But boosted by two huge pro-regime rallies in the capital and previous US statements on the battle being waged against al-Qaeda in Yemen under its ally Saleh have produced shows of defiance by the president. (*)
Editor: Kunto Wibisono
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