By Erika Solomon and Mohammed Ghobari
(Reuters) - Fighting between pro- and anti-government forces spread through Yemen's capital on Thursday and snipers shot dead two protesters and wounded 14 others, diminishing the chances of a diplomatic solution to prevent the country sliding into civil war.
Gunbattles and shelling between state troops and soldiers backing a protest movement bent on unseating President Ali Abdullah Saleh shook areas near "Change Square," the name demonstrators have given the street where thousands have camped out for eight months demanding an end to his 33-year rule.
In the evening, one or two shells hit the southern end of the protest camp, killing at one person, a spokesman for the demonstrators said.
Across Sanaa, fighting raged with heavy explosions and gunfire in Hasaba, a neighbourhood where the powerful anti-Saleh tribal leader Sadeq al-Ahmar lives. Clashes between his tribesmen and government forces dragged Yemen to the brink of civil war some months ago before a cease-fire was agreed.
A total of seven people were killed in Thursday's clashes by late afternoon, including two government soldiers and two armed tribesmen fighting alongside them, the interior ministry said in a statement. A guard at the house of an opposition figure also died when Saleh loyalists bombarded his house.
Snipers said to be lurking on the upper floors of buildings killed two protesters and wounded at least 14 around Change Square, a doctor at the square's clinic said. Angry protesters set fire to a house where they believed snipers were hiding, while medics set up a blood donation campaign for the wounded.
Negotiations on a peaceful transfer of power have stalled, and the U.N.'s Yemen envoy said the country on the south end of the Arabian Peninsula would be torn apart unless a political solution is reached soon between Saleh's camp and his foes.
Saleh has been in nearby Saudi Arabia since June recovering from wounds suffered in a June assassination attempt, leaving Yemen in a tense political limbo that on Sunday exploded into a full-blown military showdown that has so far killed 86 people.
"Unless there is a deal, or unless there a breakthrough to a political solution...the country will continue to fall apart and violence will spread to other parts of the country," United Nations envoy Jamal bin Omar told Reuters.
"It's very urgent that Yemenis make up their mind and agree on a reasonable way forward."
Yemen's deterioration is causing alarm abroad because central governance has unravelled, leaving a gun-ridden power vacuum filled by al Qaeda militants and separatist factions near vulnerable oil shipping lanes in the Red Sea and Gulf of Aden.
WINDOW CLOSING FOR PEACEFUL POWER TRANSFER
Hopes are fading that a solid cease-fire between government troops and soldiers loyal to a general who defected from Saleh in March can be forged to salvage a deal for him to cede power to launch a reform process.
Saleh has on three occasions backed out of a plan brokered by Gulf neighbours for him to step down. Yemenis eager to get on with their lives said they feared that negotiators did not have much time left before violence spiralled out of control.
"Today it's fine, maybe tomorrow too," said driver Mohammed, as he waited in a line of cars to pass a checkpoint. "They've got a few days, maybe a week to get some kind of political development. After that, I worry there will be a slaughter."
In parts of Sanaa unaffected by fighting, many Yemenis went about their business, going to restaurants while families preparing for evening wedding processions draped their cars in lace and red flowers.
But more and more checkpoints are strewn across roads and wary soldiers with rifles linger at street corners.
"Every other street corner seems to have soldiers with guns or trucks with missiles trained at someone," said one street vendor, shaking his head as he peered out his shop door.
"You feel like now it's calm but at any second the city could explode into a war zone and we'd be stuck here."
SHORT-LIVED CEASE-FIRE
A truce called by Yemen's vice president earlier this week broke down in just a matter of hours.
"There are some initiatives being discussed for a political solution under the supervision of Jamal bin Omar and we hope these efforts succeed. Their failure will push this country into more violence," a high-ranking opposition official said.
More than 400 have been killed since the grassroots revolt against repressive Saleh family rule began in January.
Spreading lawlessness could give fertile ground to al Qaeda, whose militants in the past few months have seized cities in a province just east of a key oil shipping channel.
Gulf Cooperation Council Secretary General Abdbullatif al-Zayani flew into Sanaa this week to try and resurrect the deal but left after two days with nothing to show for his efforts.
That initiative would see Saleh leave office a matter of months after signing it.
"The only way forward is a political solution, a political process that is inclusive," Bin Omar said.
"We want all the political factions and trends to participate so that we are not in a situation where there not only two sides. There are too many political actors and they will need to participate in this process."
(Reporting by Erika Solomon; Writing by Isabel Coles; Editing by Mark Heinrich)
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