SANAA Yemen teetered on the verge of civil war on Friday as President Ali Abdullah Saleh defied calls from opponents and world leaders for him to relinquish power.
More than 40 Yemenis were killed in pitched street battles in the capital Sanaa on Thursday, the fourth day of clashes since the collapse of a Gulf-brokered agreement for Saleh to step down and bring an end to four months of unrest.
Residents were streaming out of the city by the thousands to escape the violence. Others stocked up on essential supplies and waited with trepidation for what the day might bring.
Friday prayers have been a traditional rallying point for opponents and supporters of Saleh, who has ruled the impoverished nation for nearly 33 years, and could be the setting for renewed violence.
The fighting, pitting Saleh's security forces against members of the powerful Hashed tribe led by Sadiq al-Ahmar, was the bloodiest Yemen has seen since protests began in January.
More than 80 people have been killed since Sunday as fighters in civilian clothes roam districts. Machinegun fire rattled across the city on Thursday and sporadic explosions were also heard near the protest site where thousands of people demanding Saleh's departure are still camped.
As the situation deteriorated, foreign embassies reduced staff and urged their nationals to leave.
Leaders of the Group of Eight powers meeting in Deauville, France, called on Saleh to quit.
"We deplore the fighting that occurred overnight which was a direct result of the current political impasse, for which President Saleh has direct responsibility due to his refusal to sign the GCC transition agreement," a French Foreign Ministry spokesman said, referring to the Gulf Cooperation Council.
The United States, which long treated Saleh as an ally against al Qaeda, also said it now wanted him to go. U.S. Secretary of State Hillary Clinton said he had "consistently reneged" on agreements to step down.
BRINK OF RUIN, ANARCHY
There are worries that Yemen, already teetering on the brink of financial ruin, could become a failed state that would undermine regional security and pose a serious risk to its neighbor Saudi Arabia, the world's biggest oil exporter.
The United States and Saudi Arabia, both targets of foiled attacks by a wing of al Qaeda based in Yemen, are concerned any spread of anarchy could give the global militant network more room to operate.
Tribal leader Ahmar told Reuters there was no chance for mediation with Saleh and he called on regional and global powers to force him out before the country of 23 million people plunges into civil war.
"Ali Abdullah Saleh is a liar, liar, liar," said Ahmar. "We are firm. He will leave this country barefoot."
Saleh said on Wednesday he would not bow to international "dictates" to step down and leave Yemen.
Pressure has been mounting since February, when protesters inspired by democratic revolutions in Tunisia and Egypt began camping in squares and marching in their hundreds of thousands to call for Saleh to go. His attempts to stop the protests by force have so far claimed the lives of 260 people.
(Additional reporting by Mohamed Sudam and Khaled al-Mahdy in Sanaa and Erika Solomon, Nour Merza and Martina Fuchs in Dubai; Writing by Angus MacSwan; Editing by Mark Trevelyan)