By Khaled al-Mahdy
TAIZ, Yemen (Reuters) - Security forces battled opposition protesters on Wednesday in Yemen's third largest city of Taiz, while thousands more marched in fresh protests in Sanaa to demand President Ali Abdullah Saleh step down.
Seven people were wounded in Taiz, witnesses said, in clashes between government forces and armed tribesmen who appointed themselves to defend the protesters.
Protests have paralyzed Taiz, 200 km (120 miles) south of the capital Sanaa, and other opposition hubs. Yemen is entering its sixth month of mass demonstrations to demand an end to Saleh's three-decade rule.
Security forces fired shots into the air to disperse 5,000 protesters who marched near Republican Guard barracks in Taiz chanting anti-Saleh slogans and rallying against Saudi and American interference in Yemeni affairs.
Pro-opposition tribesmen responded by shooting in the air.
Neighboring Saudi Arabia and the United States have been trying to end Yemen's political stalemate, fearing growing chaos could strengthen al Qaeda's regional, Yemen-based wing.
Saleh has backed out three times from a Gulf-brokered plan to ease him from power. He is in Saudi Arabia recovering from injuries sustained in a bomb attack at his presidential palace in Sanaa in early June.
Saudi Arabia, a conservative Muslim monarchy, has long been Saleh's main financial backer and has been deeply wary of the political upheaval on its southern border.
In the capital Sanaa, tens of thousands marched to demand Saleh step down, voicing anger over what they saw as Saudi Arabia's attempts to control political developments in its poor neighbor.
"Freedom, freedom, no to Saudi tutelage," the crowds chanted.
In the south, tribesmen launched an offensive against Islamist militants in Abyan province, who have taken over two major cities in recent months and are threatening an already weak military grip on the area.
"We are defending our land, and the militants have overstepped their bounds ... We will kill them wherever they are found," a southern tribal leader told Reuters, adding they had cut supply lines to the city of Zinjibar, which was seized by militants in May.
Opponents of Saleh accuse him of deliberately letting militants gain a foothold in the south to convince Western powers and Saudi Arabia that only he stands in the way of a militant Islamist takeover.
Separately, an International Monetary Fund official said inflation in Yemen may surge to as much as 30 percent this year as unrest cripples the Arab country's economy and as damage to an oil pipeline strains already weak government finances.
(Additional reporting by Mohammed Ghobari in Sanaa, Mohammed Mukhashaf in Aden, and Martina Fuchs and Martin Dokoupil in Dubai; Writing by Isabel Coles; Editing by Roger Atwood)