At least 12 people have been killed and dozens wounded in renewed clashes between government forces and protesters in Yemen.

Al Jazeera’s correspondent in Yemen reported on Wednesday that eight of those were killed in Taiz, south of the capital Sanaa. 

More than 70 people were injured in the renewed violence, in bombings and clashes between pro-government forces on one side and pro-opposition fighters and civilians on the other, our correspondent said.

Abdel-Raziq al-Gabri, a field hospital doctor, said security forces randomly shelled several neighbourhoods in Taiz, where pro-opposition fighters had taken over a government building in the city centre.

In Arhab, north Sanaa, four more people were reportedly killed and 10 others were injured in clashes between tribal fighters and the members of the Republican Guard.

Amid the continuing violence, there was growing speculation that the Yemen’s president Ali Abdullah Saleh had agreed to a diplomatic initiative to end the unrest.

"We are convinced that we are on the verge of reaching an agreement soon and above all else the matter calls for political commitment. We hope that Eid al-Adha [Muslim holiday] will be an occasion to announce to Yemen and the world that Yemen has passed towards a new stage," Michele Cervone d'Urso, the European Union resident ambassador, was quoted by a Yemeni newspaper as saying.

Protests have swept Yemen for months with demonstrators calling on Saleh, in power since 1978, to step down.

D'Urso also asked opposition leaders to return home before the holiday next week, so that a deal could be finalised. Opposition leaders are in Kuwait to gain up support for their movement.

A spokesman for a Yemeni opposition council treated the development with caution. "We heard good things from the
diplomats, but actions speak louder than words. We are not optimistic right now but if the Gulf initiative is signed we
will be more optimistic," said Houriya Mashhur.

Taiz has been a focal point for anti-government protesters demanding the resignation Saleh.

The protests began eight months ago, inspired by Arab revolts in Tunisia and Egypt where long-serving leaders were forced out of power.

The uprising has weakened Yemen's economy and left the government in chaos, triggering a wave of unrest that has killed hundreds of people and injured thousands more.

Source: Al Jazeera and agencies