By Cynthia Johnston and Mohammed Ghobari
SANAA (Reuters) - Yemeni talks on a transition from President Ali Abdullah Saleh's rule have stalled in a public game of brinkmanship, but sources close to the discussions say a deal is still within reach.
Saleh, who has been alternately conciliatory and defiant, vowed there would be no more concessions to the opposition, which is demanding he step down after 32 years of authoritarian rule in the poverty-stricken Arabian Peninsula state.
In a sign that the back-and-forth on a transfer of power may not be dead, the ruling party's governing committee recommended forming a new government to draft a constitution based on a parliamentary system.
Violence, however, continued to dog the political process, and an ammunition storage depot raided by suspected al Qaeda militants on Sunday in south Yemen exploded when residents broke in to steal weapons after militants left. Doctors said between 50 and 55 people were killed.
Saleh, a survivor of civil wars, militancy and assassination attempts, has said Yemen may slide into civil war and fragment along regional and tribal lines if he leaves office immediately.
"We didn't give concessions for the sake of concessions, but to have Yemen avoid the consequences of war. From now, we will not offer more concessions," Saleh told the ruling party on Sunday, saying the opposition sought never-ending concessions.
A spokesman for the main opposition coalition said the talks had been halted and if the impasse continued it was likely to raise fears that violence between rival military units could replace the political process.
"We are on the path to completing a deal but the president is trying to improve the negotiating conditions, especially relating to the situation of his sons and relatives," one opposition leader said, asking not to be named.
Yemeni political sources said a deal would probably involve the resignations of Saleh and General Ali Mohsen, who has sent troops to protect the protesters.
The sons and close relatives of the president would also leave their positions, but the government wants guarantees they would not be pursued legally. It was not immediately clear if they would stay in Yemen, but that was an option.
An opposition source said Saleh was likely to hand over to a vice-president, in line with the constitution. An opposition official said the current vice-president did not want the job and a new figure would probably be chosen.
NO NEW CONSTITUTION
A new government would be formed to amend the constitution and draft laws for parliamentary and presidential elections, political sources said. However, as in Egypt, the government was expected to amend the existing constitution rather than draft a new one from scratch.
The transition was likely to proceed faster than Saleh has indicated, with a transfer well before the end of the year. There has been talk of switching to a parliamentary system based on proportional representation, political sources said.
An ammunition storage area in a factory exploded on Monday in the southern town of Jaar, where clashes took place a day earlier between militants and the army.
Doctors at a government hospital in the town said on Monday the death toll had risen to between 50 and 55.
Clashes in Jaar on Sunday, in the southern province of Abyan where al Qaeda and separatists are active, fueled Western and Saudi fears the country might slide into chaos which would benefit a resurgent Yemen-based regional arm of al Qaeda if Saleh is forced out.
The army tried to dislodge a coalition of Islamists from Jaar after they seized buildings on Saturday and security forces appeared to have deserted the town of several hundred thousand residents. Witnesses said militants attacked the ammunition factory and stole ammunition before departing.
One soldier was killed on Sunday and aircraft flew over the town. The army withdrew to Abyan's provincial capital, Zinjibar, where witnesses said security measures had been tightened after militants fired rockets at state buildings.
Washington, which has been involved in the transition talks, and Saudi Arabia have seen Saleh as a strongman to keep al Qaeda from extending its foothold in a country which many political analysts say is close to collapse.
Yemen's al Qaeda wing claimed responsibility for a foiled attempt in late 2009 to blow up an airliner bound for Detroit and for U.S.-bound cargo bombs sent in October 2010.
With central control weak, Saleh's government has relied on tribal allies to maintain order but in recent years has faced rebellions by Zaidi Shi'ites in the north and a separatist movement hoping to recreate the state of South Yemen that united with the north under Saleh's rule in 1990.
More than 80 people have been killed since protests began in January, inspired by popular revolts in Tunisia and Egypt, to demand Saleh's departure.
(Additional reporting by Mohammed Mukhashaf; Writing by Cynthia Johnston; Editing by Andrew Dobbie)