By Erika Solomon and Mohammed Ghobari
DUBAI/SANAA (Reuters) - Bandages cover the extensive burns on President Ali Abdullah Saleh's body, but he insists he will return Yemen -- a move threatening to further fragment a country convulsed by chaos.
In a televised recording last week, the frail yet defiant 69-year-old made his first appearance since a bomb attack on his mosque in Sanaa in early June. From Saudi Arabia, where he is convalescing, he vowed to "confront a challenge with a challenge."
To supporters, the sight of Saleh was a cause for celebration after speculation over his health. They say he is down, but not out, despite six months of mass protests that have loosened his three-decade grip on power.
"The president will return soon and we will hold the biggest party in Yemen's history to receive him, he was in good health and that angered the opposition," said Abdullah Abdulrahman, a supporter in Sanaa who fired celebratory shots after seeing the footage.
Riyadh and Washington, both targets of foiled attacks by the Yemen-based Al Qaeda in the Arabian Peninsula, hoped to lessen turmoil by pressing Saleh to accept a Gulf Arab power transfer plan. But despite signaling acceptance to three different versions of plan, he backed out of signing every time.
Most likely, analysts say, Saleh can only return as a weakened figurehead unable to unify a country awash in weapons and so splintered that some opposition groups have begun to turn their guns on each other.
"I don't think there is any side strong enough to win the conflict, only strong enough to ensure the stalemate continues" said Ghanem Nuseibeh, a London-based analyst at Political Capital.
The capital itself is divided: the troops of Ali Mohsen, a top general who defected from Saleh to the protesters in March, controls the north. Saleh's relatives, who lead the powerful Republican Guard forces, have the south.
Other provinces, where tens of thousands of protesters still camp out daily, are embroiled in constant clashes between pro-opposition tribesmen and the Republican Guard. Saleh's sons and nephews are eager to maintain the status quo, hoping the president can return.
"I think they are trying to drag out the process as long as possible in the hopes that President Saleh can return and go from there," said Gregory Johnsen, a Yemen scholar at Princeton. "Essentially what you have is the president's family holding the country hostage."
LACK OF LEADERS
General Mohsen has not shown the military strength to overpower Saleh's loyalists and the wealthy al-Ahmar family, seen as close to Yemen's bank roller Saudi Arabia, lost their chance at a smooth transition into power after their tribal backers clashed with Saleh's forces, a fight that nearly tipped the country into civil war.
"It is over for all three families, over. They attacked each other, and so in a sense they killed each other politically," said Yemeni analyst Ali Seif Hassan in Sanaa.
Even the major donors Washington and Riyadh seem hesitant over what to do about Yemen.
Autocratic Saudi Arabia faces more turmoil as it looks for a strong man but is loathe to encourage a democracy on its borders. Nuseibeh, of Political Capital, said the United States might welcome a federalized, democratic Yemen if it could ensure powerful forces help keep a lid on al Qaeda.
But neither power seems willing to tip the scale by backing a specific group or plan, instead hoping they can revive the thrice-foiled Gulf initiative and create a power share.
The growing challenge of unifying Yemen, the Arab world's poorest state, which borders oil giant Saudi Arabia and sits on a strategic oil shipping lane, may give time for al Qaeda's aggressive Yemen-based branch and insurgents in the north and south seeking to chip away at power.
"The longer the struggle, the more cracks you will see ... If the stalemate continues it will strengthen certain elements of the military and the danger is it could consolidate the power of AQAP," Nuseibeh said.
The only choice that may be acceptable to all sides seems to be vice president Abdrabu Sayed Hadi Mansour, the current acting president.
But he is seen as weak and likely to bow to Saleh's influence -- a sign the veteran leader may yet have the last word.
Speculation is rife among Saleh supporters that the president may be staging a comeback. They hope he will return to Yemen this Sunday, July 17 -- the 33rd anniversary of his ascent to power.
"It is clear Saleh is not going to be able to rule as he'd done before 2011," said Princeton scholar Johnsen. "But as we've seen, there is no guarantee Saleh is going to go quietly."
(Additional reporting by Isabel Coles in Dubai; Writing by Erika Solomon; Editing by Alison Williams)