Sanaa: The United States on Monday called on Yemen to move towards democracy while President Ali Abdullah Saleh recovers from shrapnel wounds in Saudi Arabia.
While Yemen's acting leader insisted Saleh would return in days, diplomats and analysts feel Saleh's stay in Saudi Arabia may be prolonged as regional heavyweight Riyadh tries to press Saleh to hand over power to prevent its neighbour imploding.
"We are calling for a peaceful and orderly transition," US Secretary of State Hillary Clinton told reporters. "We feel that an immediate transition is in the best interests of the Yemeni people."
Saleh, 69, is being treated in a Riyadh hospital after he was wounded on Friday when a rocket struck his Sanaa palace, killing seven people and wounding senior officials and advisers.
"(Saleh) is in Saudi Arabia receiving medical treatment. There is a civilian government that remains in place in Yemen. We believe that the time is now to begin that peaceful transition towards a democratic process," State Department spokesman Mark Toner told a news briefing.
Pressure has mounted on all parties to find an exit strategy to clashes bringing Yemen to the brink of civil war, amid worries it could become a failed state home to an al Qaeda wing adjacent to the world's biggest oil exporter, Saudi Arabia.
A Saudi-brokered truce was holding in Sanaa after two weeks of fighting between Saleh's forces and a powerful tribal group which killed more than 200 people and forced thousands to flee.
But there was fresh fighting in the flashpoint southern city of Taiz, where the United Nations said it was investigating reports that as many as 50 have been killed in the past week.
An opposition party coalition, which joined months of street protests to end Saleh's three-decade rule, said it backed transferring power to the vice-president, Abu-Rabbu Mansour Hadi, who is now the acting leader.
Hadi was quoted as saying on the Saba state news agency that Saleh's health was improving and he "would return to the homeland in the coming days."
But a diplomat in the region said: "I don't think the Saudis or his people want him back. He doesn't have regional support."
Yemenis have awaited word on whether Saleh would sign a Gulf-brokered transition deal he has so far rejected.
In a joint statement, German Chancellor Angela Merkel, French President Nicolas Sarkozy, and the Prime Ministers of Britain, Spain and Italy, thanked Saudi Arabia for receiving Saleh for treatment, and called on all parties in Yemen to "find a means of reconciliation on the basis of the GCC initiative."
SAUDI INFLUENCE
The Saudi-led Gulf Cooperation Council urged all parties to work to end violence and said it was continuing its efforts to negotiate a power-transfer deal.
Yemen , which relies on oil for 60 percent of its economy, has been dealt a heavy blow by the closure of an oil pipeline that trade sources said have caused a fuel shortages.
But the future of Yemen, riven by complex rivalries among tribal leaders, generals and politicians, remains uncertain.
"Saleh's departure to Saudi Arabia isn't just courtesy from the Saudi ruling family," said Egyptian political analyst Nabil Abdel-Fattah. "The security of Saudi Arabia and the Gulf is linked to security in Yemen."
Youthful protesters, interpreting Saleh's absence as potentially permanent, continued to celebrate in Sanaa where they have staged anti-government demonstrations since January.
"Who is next?" asked one banner held up by protesters in a sea of red, white and black Yemeni flags, referring to the wave of uprisings in Arab world that has toppled the leaders of Egypt and Tunisia and inspired revolts in Syria, Libya and Bahrain.
Yemen's pro-Saleh state media said his supporters took to streets to celebrate "a successful operation" in the provinces of Ibb and Dhamar with song, dance and shooting into the air.
Saleh's departure could make it hard for the veteran president to retain control, although his close relatives still command key military units and security forces.
Other contenders in a possible power struggle include the well-armed Hashed tribal federation, breakaway military leaders, Islamists, leftists and an angry public seeking relief from crippling poverty, corruption and failing public services.
In the meantime, fuel shortages in many parts of the country worsened as the main oil pipeline remained shut and tight funding hit imports.
A blast in March on the pipeline, suspected to have been carried out by angry tribesmen, has stopped the flow of light Marib crude, which has forced the 130,000 barrels per day (bpd) Aden refinery to shut and hurt fuel supplies.
Saleh, a political survivor, has defied global calls to step down and survived the defection of top generals, ministers and ambassadors who left the government after troops killed many demonstrators in March. More than 450 people have been killed in the unrest shaking the nation of 23 million since late January.
Saleh has exasperated his former U.S. and Saudi allies, who once saw him as a key counter-terrorism partner, by repeatedly reneging on the transition plan, even though it offered him immunity from prosecution -- something rejected by protesters.
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