Presidential guards loyal to Yemen's president, Ali Abdullah Saleh, clashed in the town of Mukalla on Thursday with army units backing opposition groups who are demanding his removal.
The clash wounded one person and highlighted the tension in Yemen, where top generals, diplomats and tribal chiefs defected this week to the side of democracy protesters who have been camped out in central Sana'a for six weeks.
Army and presidential guards – a force headed by Saleh's son Ahmed – clashed earlier this week in Mukalla, a coastal city in the Hadramout region, leaving one dead on each side.
Saleh and opposition groups have both made proposals for reform. On Wednesday Saleh offered new presidential elections by January 2012 instead of when his term ends in September 2013.
An umbrella group of civil society organisations called for a transitional council of nine figures "not involved with the corruption of the old regime" to draw up a new constitution over a six-month period ahead of elections.
But the issue of what would happen to Saleh, who outlasted a civil war in 1994, a recent rebellion by northern Shias and separatist discontent in the south, was left untouched in the proposal from the group, called the Civil Bloc.
Opposition parties said on Thursday they were tired of the drip-feed of concessions. "This talk is aimed at delaying the announcement of the death of the regime. The opposition does not need to respond," said spokesman Muhammad al-Sabry.
Saleh, in power since 1978, made the offer in a letter sent not only to the opposition but also to General Ali Mohsen, commander of the north-western zone.
Mohsen said this week he was now supporting protesters in a blow to Saleh that has helped turn the tide against him. Mohsen and others defectors made their move after 52 protesters were shot dead in Sana'a last week.
"The political tide in Yemen has turned decisively against President Ali Abdullah Saleh," the International Crisis Group (ICG) said in a report. "His choices are limited: he can fight his own military or negotiate a rapid and dignified transfer of power."
Saleh reacted to the loss of his ally Mohsen, seen as Yemen's second most powerful figure, with a series of meetings with military and tribal leaders where he warned against a "coup" that would lead to civil war.
Saleh also has intelligence services on his side and security sources say he has beefed up his personal security for fear of an assassination attempt.
Western countries and Arab allies, such as Saudi Arabia, are still worried about a power vacuum if Saleh goes that could embolden al-Qaida, which has entrenched itself in the mountainous Arabian Peninsula state.
"We've had a good working relationship with President Saleh. He's been an important ally in the counter-terrorism arena," the US defence secretary, Robert Gates, said on Wednesday. "I think we will basically just continue to watch the situation. We haven't done any post-Saleh planning," he said.
Protesters who have been encamped in their thousands outside Sana'a University for six weeks have hardened in their attitude towards Saleh, rejecting any idea of his remaining.
They are planning a "day of departure" this Friday after prayers that could bring hundreds of thousands on to the streets.
Around 10,000 people gathered on Thursday morning, chanting slogans such as "Go, go, you coward; you are an American agent."
Authorities have withdrawn the licences of al-Jazeera correspondents and ordered them to stop work, the Qatari channel said. Yemeni state media accuse the network of bias.
Protesters are divided over what they think of Mohsen, an Islamist from the same Hashed tribal confederation as Saleh who was popularly regarded as the second most powerful man in the country before he abandoned his old comrade.
"The country risks replacing the current regime with one bearing striking similarities, dominated by tribal elites from Hashed and powerful Islamists," the ICG report said.
Some protesters display the general's picture on their tents in the protest encampment in Sana'a, but opposition leaders regard his motives with suspicion, and few would want him to have a role in any future transitional government.
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