|Street protests against the president have been going on for months [Reuters]
Yemeni troops have clashed with fighters in the south of the country, increasing tensions in the Arab state already beset by protests against Ali Abdullah Saleh, the president.
The army on Sunday tried to dislodge an armed Islamist group that had taken control of several key buildings, including an ammunition factory, in the town of Jaar in Abyan province.
One soldier was reported killed in the clash and other reports suggested that the police had deserted the town. A day earlier, five soldiers were killed in an ambush in Lowdar, also in Abyan.
The province is seen as a stronghold of al-Qaeda in the Arabian Peninsula, the Yemeni wing of the network which Western countries and neighbour Saudi Arabia fear could take advantage of any power vacuum if protesters succeed in ousting Saleh.
Robert Gates, the US defence secretary, said on Sunday that the replacement of Saleh by a weaker leader would pose "a real problem" for the US.
"I think it is a real concern because the most active and at this point perhaps the most aggressive branch of al-Qaeda, al-Qaeda in the Arabian Peninsula, operates out of Yemen," Gates said.
"And we've had counter-terrorism cooperation with President Saleh and the Yemeni security services.
"So if that government collapses, or is replaced by one who is dramatically more weak, then I think we'd face some additional challenges out of Yemen, there's no question about it. It's a real problem."
Both Washington and Saudi Arabia have backed Saleh in a bid to keep al-Qaeda from expanding its foothold in a country many political analysts say is close to collapse.
But Saleh has come under pressure in recent months, with tens of thousands of Yemenis demanding he step down.
The president, who has been in power for 32 years, has cracked down on protests but has also offered concessions, pledging not to seek another period in office beyond 2013.
Demonstrators and anti-government activists want him to step down much sooner.
But in an interview shown on Al Arabiya on Sunday, Saleh seemed to suggest that he would stay at least for the short term and warned that Yemen would slide into civil conflict if he left immediately.
"Yemen is a time bomb and if we and our friendly countries don't have a return to dialogue, there will be a destructive civil war," he said.
He also said that he was prepared for a dignified departure at any stage, but that opposition parties were hijacking the protests to demand he quit without organising a democratic handover.
"I could leave power ... even in a few hours, on condition of maintaining respect and prestige," Saleh said. "I have to take the country to safe shores ... I'm holding on to power in order to hand it over peaceably."
Opposition parties have been in talks with Saleh about his stepping down, but have so far rebuffed his demands, which include protection for him and his family from prosecution.
"We still have a very big gap," said Yassin Noman, the rotating head of Yemen's opposition coalition. "I think he is manoeuvring."
More than 80 people have been killed since anti-government protests started in January.