|PM Mohammad Basindwa is to head the new government, which will carry out its duties for three months [EPA]
Yemen's vice-president has issued a decree approving the formation of a government of national unity as agreed under a Gulf-brokered deal to end months of bloody unrest.
The decree on Wednesday by Abdrabuh Mansur Hadi establishes a cabinet comprised of 35 ministerial positions equally divided between President Ali Abdullah Saleh's party and the opposition.
The new government, headed by prime minister Mohammed Basindwa, will carry out its duties for three months, after which elections will be held and Hadi will formally take over the presidency.
Its formation is in line with a Gulf Co-operation Council plan, which is backed by the United Nations, for Saleh to hand his powers over to his deputy in return for immunity from prosecution for him and his family.
Saleh's ministers for foreign affairs and defence, Abu Bakr al-Kurbi and Mohammad Nasser Ahmad Ali respectively, have retained their old posts, according to the decree published by state news agency Saba.
However, the interior ministry has been entrusted to a member of the opposition, Abdelqader Qahtani, while the human rights portfolio goes to Huria Mashhur, spokesman of the National Council, an opposition umbrella group.
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However, violence continued on the streets of Sanaa on Wednesday, as pro-government forces and tribesmen opposed to Saleh traded artillery fire, witnesses said.
Top oil exporter Saudi Arabia shares US fears that a slide towards more chaos in Yemen would embolden the country's al-Qaeda wing, against which Washington has waged a campaign of drone strikes, in a country sitting next to oil shipping routes.
Witnesses said government forces clashed in the capital's al-Hasaba district with shells falling on government buildings, including the headquarters of state radio and the prime ministerial offices.
"Militants and army soldiers have been fighting near the interior ministry since dawn. They're using machine guns and RPGs," Abdul Rahman, a Sanaa resident, said by phone as gunfire reverberated in the background.
"We are trapped in our homes and can't get out," he said.
The capital saw open warfare between Saleh's forces and those of Sadeq al-Ahmar, a leader of the powerful Hashed tribal
confederation, in May after Saleh ducked out of signing the transition deal backed by the Gulf Co-operation Council.
But the deal is threatened by an eruption of fighting between Saleh's foes and allies in Taiz, 200 km south of Sanaa, that has left at least 20 dead and led the UN to demand that government forces stop shooting protesters.
Any new government faces challenges including rising separatist sentiment in the south, once an independent socialist republic, with which Saleh's north fought a civil war in 1994 following unification four years earlier.
The region is also the site of conflict between government forces and anti-government fighters, a conflict that has displaced tens of thousands of people.