By Mohammed Ghobari
SANAA (Reuters) - President Ali Abdullah Saleh on Friday rejected an opposition plan for him to transfer power by the end of 2011, as crowds demonstrating against his rule swelled into hundreds of thousands.
Saleh, who has ruled the poverty-stricken Arab country for 32 years, is sticking to his earlier offer to step down when his term ends in 2013.
However, he agreed to a reform plan proposed by religious leaders earlier this week which would revamp elections, parliament and the judicial system.
"The president rejected the proposal and is holding on to his previous offer," the opposition's rotating president Mohammed al-Mutawakil said on Friday.
Yemen, a neighbor of Saudi Arabia, was teetering on the brink of failed statehood even before the protests, with Saleh struggling to cement a truce with Shi'ite rebels in the north and quell a budding secessionist rebellion in the south.
"Oh God, god please get rid of Ali Abdullah," protesters chanted in the capital Sanaa, where protests stretched back for more than 2 km in the streets around Sanaa University.
Political analysts say the growing protests, inspired by unrest that has toppled the leaders of Egypt and Tunisia, may be reaching a point where it will be difficult even for Saleh, a clever political survivor, to cling to power.
Saleh is also an important U.S. ally against al Qaeda's Yemen-based wing.
Earlier on Friday, Shi'ite rebels accused the Yemeni army of firing rockets on a protest in Harf Sufyan in the north, where thousands had gathered. Two people were killed and 13 injured.
"During a peaceful protest this Friday morning ... demanding the fall of the regime, an end to corruption and political change, a military post fired rockets at a group of protesters and hit dozens of people," a statement from the rebels said.
The government said armed men had fired on a military post in Harf Sufyan, wounding four security men, but denied having fired on the protest.
The rebels complain of discrimination by the government and announced their support for the protests in early February. They have been in an uneasy truce with the government since February 2010 to end a war that has raged on and off since 2004.
CLERICS CALL FOR PROTESTS
A plan proposed by clerics this week calls for changing the constitution and rewriting election laws to ensure fair representation in parliament, opening up voter registration and making politics more democratic, and guaranteeing the right to peaceful protest.
The opposition had proposed a mostly identical plan but with the added requirement that Saleh hand over power this year, but he rejected that condition outright on Friday.
Clerics sympathetic to the opposition, whose ranks have grown with the defection of Saleh allies, joined protesters in Sanaa for Friday prayers and called on Yemenis to take to the streets to demand Saleh step down.
Tens of thousands of protesters, and possibly more than 100,000, rallied in Sanaa in what was among the largest demonstration yet, a Reuters journalist said. Similar numbers demonstrated in Taiz, south of Sanaa, with tens of thousands in Ibb and Aden.
Opposition leaders put the combined number of protesters at more than 500,000 in Sanaa and Taiz, but that could not be independently verified.
"This is a corrupt and oppressive regime, and God is calling on us to get rid of it," one preacher shouted to the crowds in Sanaa, telling them to pray that they, and Libyan rebels fighting against Muammar Gaddafi, succeed in toppling their governments.
Protesters say they are frustrated with widespread corruption and soaring unemployment in a country where 40 percent of its 23 million people live on $2 a day or less and a third face chronic hunger.
Saleh loyalists, in a sign that he still has significant support, organised a counter-protest on Friday attended by about 100,000 people, a Reuters reporter said.
"No to sedition. No to chaos. Yes to stability," they chanted. Police using loudspeakers called on Yemenis joining anti-government protesters to return home, and the demonstrators shouted to the police to join them.
(Additional reporting by Mohamed Sudam; Writing by Erika Solomon; Editing by Andrew Dobbie)