SANAA Yemen's president said on Tuesday his country would descend into civil war if he were forced to quit and Washington voiced concern about instability in the Arab state that has become an al Qaeda stronghold.
Seven weeks of unrelenting anti-government protests and defections among the ruling elite have piled pressure on Ali Abdullah Saleh, a U.S. ally against radical Islamist ambitions in the Arabian peninsula, to step down immediately after 32 years in power.
But an aide said he would leave office only after organizing parliamentary polls and establishing democratic institutions, by January 2012 -- a declaration the opposition promptly rejected.
"Ali Abdullah Saleh does not seek power," Saleh's media secretary Ahmed al-Sufi told Reuters. "Ali Abdullah Saleh will not leave without knowing who he is handing over to."
The United States, grappling with the diplomatic fallout of uprisings and uncertainty across the Arab world, voiced rare public alarm about the situation in Yemen.
"We are obviously concerned about the instability in Yemen," U.S. Defense Secretary Robert Gates said. His chief concern was to avoid "diversion of attention" from opposing al Qaeda there.
Opposition spokesman Mohammed al-Sabry, rejecting Saleh's offer to go by January 2012, said the coming hours would be decisive.
In speeches to army officers and tribal leaders in Sanaa, Saleh said Yemen faced a danger of civil war and disintegration because of efforts to stage a "coup" against his rule.
"You have an agenda to tear down the country, the country will be divided into three instead of two ... (parts). A southern part, northern part and a middle part. This is what is being sought by defectors against ... unity," he said, referring to northern Shi'ite rebels and al Qaeda militants.
"Those who want to climb up to power through coups should know that this is out of the question. The homeland will not be stable, there will be a civil war, a bloody war. They should carefully consider this," Saleh told army commanders.
Presidential guards loyal to Saleh surrounded an air force battalion in the coastal city of Hudaida after its commander said he supported the protesters. A presidential guard and a soldier died in clashes between the two forces in the southern coastal city of Mukalla late on Monday, medical sources said.
In southern Abyan province, troops clashed with al Qaeda militants, killing 12 and wounding five, state media said.
Liquefied natural gas producer Yemen LNG has told customers that unrest could lead to supply disruptions, leading stakeholder Total said.
SLIDE INTO FAILED STATE
Western countries fear the political crisis could hasten a slide into failed nation status for a country that borders the world's biggest oil exporter, Saudi Arabia, and major shipping routes. One scenario could see the country split into separate zones along tribal, military or regional lines.
Al Qaeda has already used Yemen to attempt attacks in Saudi Arabia and the United States in the past two years. The Shi'ite Houthi movement has staged a number of revolts against Saleh.
One opposition leader offered Saleh the prospect of secure retirement if, like Egyptian President Hosni Mubarak, he would go quietly, unlike Libyan leader Muammar Gaddafi.
"He shouldn't follow the style of Gaddafi by destroying the country and killing people," Yassin Noman, rotating head of Yemen's opposition coalition said.
"After this long term of governing, he should say: Thank you my people, I leave you peacefully."
"I know the morality of Yemeni people. If he left peacefully, they will look at him as a real leader. He will be able to live wherever he likes," Noman told Reuters. "They will ensure him a very nice life. His dignity will be kept."
Several generals and officials have abandoned Saleh this week after a massacre of pro-democracy demonstrators on Friday
On Tuesday, Abdel-Malik Mansour, Yemen's envoy to the Arab League, told Al Arabiya television he was siding with protesters. Abdul-Rahman al-Iryani, whom Saleh sacked as environment minister on Sunday along with the rest of the cabinet, said on Facebook he was joining "the revolutionaries."
Defections have included generals, tribal leaders, diplomats and ministers. They have gained momentum since gunmen loyal to Saleh opened fire on demonstrators in the capital Sanaa on Friday. Fifty-two people were killed.
A crowd of around 10,000 gathered outside Sanaa University in a rally that has been repeated for the past seven weeks, with youth playing a key role. Saleh offered dialogue with young people on Tuesday, and state media said he was sympathetic to their problems.
Protesters, however, have been uncompromising. Echoing demands that have been satisfied in Tunisia and Egypt and continue to be heard elsewhere across the region, they chanted: "The people want the fall of regime."
The body of one of those killed on Friday was brought to the protesters before burial. "The people want a trial for the butcher," they shouted, hurling abuse at Saleh.
France on Monday became the first Western power to call publicly for Saleh to stand down. Foreign Minister Alain Juppe described his departure as "unavoidable."
Yemeni Foreign Minister Abubakr al-Qirbi returned from Riyadh on Monday where Saleh sent him to seek Saudi-led Gulf Arab mediation. A diplomatic source said there had been no indication of success in the effort to involve those countries.
Tribal sources said tribal sheikhs had embarked on mediation efforts on Tuesday, focusing on a potential agreement that protests could continue, violence against protesters would be investigated and a smooth transition of power would take place.
No more details were available.
On Tuesday, soldiers were preventing cars driving along roads close to Saleh's presidential palace in Sanaa. Late on Monday night residents heard explosions and shooting near a presidential place in Yemen's eastern port of Mukalla.
General Ali Mohsen, commander of the northwest military zone and Saleh's kinsman from the al-Ahmar clan, said on Monday he was backing the protesters and warned of civil war.
On Tuesday Mohsen -- seen by northern rebels as a ruthless military leader -- declared in a statement read out to the protesters camping out in Sanaa that the "era of military coups is over" and vowed to protect the "youth revolution."
Tanks were deployed outside the presidential palace in the southern port city of Aden, focal point of a separatist movement hoping to escape Yemen's myriad problems by recreating the former South Yemen that feels cheated by unity under Saleh.
Opponents complain that Yemen under Saleh has failed to meet the basic needs of the country's 23 million people. Unemployment is around 35 percent and 50 percent for young people. Oil wealth is dwindling and water is running out.
(Additional reporting by Mohammed Ghobari and Mohammed Mukhashaf; Writing by Andrew Hammond; Editing by Samia Nakhoul and Janet Lawrence)