Yemen's president is to name a new prime minister and cut a disputed fuel price rise as he bids to head off protests by Shia rebels, an official said.
Faced with pressure from the Houthi rebels and a deepening political crisis, president Abdrabuh Mansour Hadi "has agreed to go ahead with the initiative and form a new national unity government", a spokesman said,
The initiative comes after Houthi Shia rebel leader Abdulmalik al-Houthi on Sunday urged supporters to press on with a campaign in Sanaa to oust the government.
Houthi fighters have been camped around the capital for the past two weeks and held protests almost throughout August to push for the government's resignation, accusing it of corruption.
Al Jazeera's Hashem Ahelbarra, reporting from the Yemeni capital, Sanaa, said the new initiative could be the last opportunity to secure a political deal to "break the impasse and turn the chapter of weeks of political divide that has crippled Yemen".
However, a spokesman for the rebels, Mohammed Abdulsalam, dismissed the initiative as an attempt to "skirt around the demands of the Yemeni people," writing on his Facebook page that the rebels "do not agree to it".
'Dominating political force'
The rebel leader has yet to officially respond, though a committee organising rebel sit-ins in the capital called for protests on Wednesday against the initiative.
Analysts say the rebels are trying to establish themselves as the dominant political force in the northern highlands, where the Houthi Shia are the majority community.
Hadi will "assign within a week" a new prime minister to form a "national unity government", according to the text of the proposal published by the official Saba news agency.
The president himself will name the defence, interior, foreign and finance ministers in the cabinet that will also include Huthis and members of the separatist Southern Movement.
A controversial fuel price rise implemented in July would also be "reviewed" downwards by about 30 percent, while the anticipated government will work to increase minimum wages, according to the initiative.
The president's spokesman said the proposal was approved at a meeting of pro-government political parties chaired by Hadi.