By Mohamed Sudam
SANAA (Reuters) - Yemen's President Ali Abdullah Saleh appeared set on Monday to reject a Gulf Arab initiative that calls on him to hand over power to his deputy and establish a new government headed by the opposition.
Gulf Arab foreign ministers meeting in Riyadh late on Sunday said publicly for the first time that the framework of their mediation effort involves Saleh standing down, prompting Yemen's official media to reject the initiative.
The ministers called for a meeting of parties to the Yemeni conflict to meet in Saudi Arabia but did not set a date.
"Party, popular and youth leaders and civil society organizations expressed their rejection of what was announced in the GCC statement concerning Yemen," a statement on state news agency Saba and other key government outlets said overnight after details of the Riyadh statement were announced.
The state news agency rarely strays far from the government line and the statement appeared to prepare the ground for Saleh to reject an initiative that he had initially welcomed.
Long regarded by the West as a vital ally against al Qaeda militants, Saleh has warned of civil war and the break-up of Yemen if he is forced to leave power before organizing new parliamentary and presidential elections over the next year.
Saleh had sought Saudi mediation for some weeks, but Gulf diplomatic sources have said Riyadh was prompted in the end by concern over the deteriorating security situation in its southern neighbor after Saleh failed to act on a backroom deal struck with U.S. officials on a quick exit.
Saudi Arabia is the key financier of the Yemeni government as well as many Yemeni tribes on its border.
The sources said Washington let Saudi Arabia step in with its mediation after Saleh was seen delaying in maneuvers to ensure that he and his sons do not face prosecution attempts, the fate of the deposed rulers of Tunisia and Egypt.
With more than 100 protesters killed by security forces in two months, countries of the region became convinced that Saleh is an obstacle to stability in a country that overlooks a shipping lane where over 3 million barrels of oil pass daily.
GCC PLAN WELCOMED
The GCC statement on Sunday talked of "the formation of a national unity government under the leadership of the opposition which has the right to form committees ... to draw up a constitution and hold elections."
It said Saleh should hand his authorities over to his vice president and that all parties should "stop all forms of revenge .. and (legal) pursuance, through guarantees offered" -- wording that seemed to offer Saleh assurances of no prosecutions for him or his family once he leaves office.
Saleh's deputy Abd-Rabbu Mansour Hadi has said he is not interested, which could open the way to the perennial survivor nominating an interim successor of his own choice.
It is not clear if the Gulf plan would include representatives of the street protesters, who could reject any deal struck without their approval.
"No, no to compromise," tens of thousands chanted on Sunday as they marched in the streets surrounding the main sit-in area near Sanaa University, which is protected by troops loyal to general Ali Mohsen who turned against Saleh last month.
A spokesman for the general, a Saleh kinsman seen by many Yemenis as too tainted by the system, said on Monday that he welcomed the details of the GCC plan announced in Riyadh.
Youth groups leading the sit-in later called for a campaign of civil disobedience in Sanaa on Monday and Wednesday to protest against "the persistent committing of bloody massacres of peaceful protesters ... by Saleh's regime."
Violent clashes have continued almost daily over the past week, with at least 27 people killed. Security forces have used live ammunition and tear gas to rout protesters.
Saleh and opposition parties, including Mohsen, had welcomed the Gulf mediation when it was first announced last week.
Opposition sources had said it could guarantee him and his family the immunity from prosecution they sought, though the thousands of protesters in Sanaa have demanded he face legal action.
The plan stalled last week when Saleh reacted angrily to comments from Qatar's prime minister saying the mediation would lead to him standing down and his foreign minister said Qatar had pre-empted the talks in stating in advance what their conclusion would be -- Saleh resigning.
Even before the protests Saleh was struggling to quell a separatist rebellion in the south and a Shi'ite Muslim insurgency in the north -- violence that has given the Arabian Peninsula branch of al Qaeda more room to operate.
In continued unrest, two soldiers and a militant were killed in a clash between militants and the army in Lowdar in the restive Abyan province of south Yemen, which is seen as a hotbed of al Qaeda activity.
Some 40 percent of Yemen's 23 million people live on less than $2 a day and one-third face chronic hunger. Exasperation with state repression and rampant corruption have poured fuel on the fire of the pro-democracy movement.
(Additional reporting by Mohammed Mukhashaf; Writing by Andrew Hammond; Editing by Jon Hemming)