Abubakr al-Qirbi, Yemen's foreign minister, has said he hopes a deal to transfer power peacefully from Ali Abdullah Saleh, the president, could be negotiated soon, but the opposition says that there is still a large gap between opposition demands and what the government is prepared to offer.
Saleh will hold "crisis talks" with his own party on Sunday to update senior leaders on the talks with the opposition, Reuters reported.
Violence was reported in the country's south, with residents of the town of Jaar (in Abyan province) reporting that they were being shelled by the military. Earlier, they had taken control of an ammunition factory after government forces pulled back from the city.
At a meeting with tribal leaders on Saturday, Saleh vowed to hold firm in his resolve to serve out his current term until 2013.
"The legitimate authority is firm and steadfast in face of challenges, and we shall not allow a small minority to overcome the majority of the Yemeni people," he said.
His party, the General People's Congress, termed the opposition's demand that Saleh step down "unacceptable and illogical" in a statement.
"It is unacceptable and illogical to override the constitutional legality or for the minority to impose its will on the majority of the people," the party said.
The GPC accused the opposition of closing the door on dialogue, and Tareq al-Shami, a party spokesman, told the AFP news agency that in the absence of an agreement, the party was "committed to the constitutional process, which provides for presidential elections in 2013".
Earlier on Saturday, Saleh had told al Arabiya television that he would be prepared to leave office, but wanted to remain in charge of his ruling General People's Congress party.
"I could leave power ... even in a few hours, on condition of maintaining dignity and prestige," he said. "I have to take the country to safe shores ... I'm holding on to power in order to hand it over peaceably ... I'm not looking for a home in Jeddah or Paris."
Al-Qirbi said on Saturday that a deal would be based on an offer by the president to step down by year-end after elections and a new constitution.
"President Saleh is willing to look at all possibilities, as long as there are really serious commitments by the JMP [opposition] to come and initiate a serious dialogue between them and the ruling party."
Speaking about talks on Saturday between the country's main opposition party and the ruling party, al-Qirbi said: "I think things are very close if the real intention is really to reach an agreement. But if there are parties who want to obstruct it then of course one cannot predict."
Wide gap remains
Talk of a swift end to the deadlock appears to be premature, however, as opposition political parties and activists have hardened their stance, demanding that Saleh face court cases regarding alleged corruption.
Yassin Noman, the rotating head of Yemen's opposition coalition, says that the gap between what the ruling party is offering and what protesters want is still too large.
"We still have a very big gap ... I think [Saleh] is manoeuvring," he said.
Hameed al-Ahmar, the secretary of the opposition's National Dialogue Committee, told Al Jazeera that it was Saleh who "violated" an agreement that been reached during Saturday's talks. Al-Ahmar said that the power transfer agreement involved Saleh appointing a vice-president to whom he would hand over power.
"Saleh not only violated the deal, but also attempted to deploy the army to take control of the capital Sanaa, where thousands of his opponents are camping. But the Yemeni tribes blocked the move," al-Ahmar said.
Ahmed al-Sufi, a spokesman for the embattled president, said that Saleh's vice president and political adviser on Saturday met the US ambassador and tribal and military leaders who have defected to the opposition.
The Associated Press quoted him as saying that the ruling party wanted to discuss a transition, but that the opposition demanded Saleh's immediate resignation and that the demand was unacceptable.
Saleh said on Friday he was ready to cede power to stop more bloodshed in Yemen, but only to what he called "safe hands" after weeks of street demonstrations demanding his immediate departure.
Saleh has come under mounting pressure to resign after snipers firing from rooftops killed 52 protesters a week ago after Friday prayers, triggering a string of defections including that of a senior general.
As well as a violent crackdown on protests, the president has offered a string of concessions, all rejected by opposition parties, including transfer of power after the drafting of a new constitution and holding parliamentary and presidential elections by the end of the year.
Among Saleh's conditions for leaving office include an indemnity for him and his family from prosecution.
Al Jazeera's special correspondent in Sanaa said: "One of the key demands of the protesters who we've been speaking to is that the family of President Saleh and President Saleh himself face justice for what they have done to the country - so it's very unlikely that this provision will be accepted by the opposition forces and by the people."
Yemeni political sources said that some issues that could hold up a deal were whether the opposition would give guarantees not to pursue Saleh and his family legally.
Saleh opponents also want to be sure his close relatives leave positions of power.
Also on Saturday, three southern opposition leaders, one of whom is a member of a secessionist movement, who have been in jail for a month were released. They were named as Kassem Askar Jibran, a former diploment, Kassem Othman al-Dayri, the head of an army veteran's association, and Ali bin Ali Shukri, a Southern Movement leader.
American and European donors to the Yemeni government have informed President Saleh, meanwhile, that political change is necessary, and that it must be both peaceful and at the least cost, sources told Al Jazeera. They confirmed that these donors had met with various tribal and political leaders, affirming their support for peaceful change in Yemen.
On Sunday, a suspected al-Qaeda attack on an army convoy killed at least six Yemeni soldiers and wounded four others, a military official said.
The attack occurred about three kilometres north of Marib, a town that is east of the capital, and involved the seizure of two vehicles by the assailants.
On Saturday, AFP reported that six "suspected al-Qaeda members" had been killed by army soldiers in the country's south. The six were thought to be part of a group of fighters who attacked a post at a power plant in the town of Loder, in Abyan province.
Western countries worry that al-Qaeda fighters could take advantage of any power vacuum arising from a rocky transition if Saleh, a key US and Saudi ally, finally steps down after 32 years in office.
Source: Al Jazeera and agencies