Yemeni forces sprayed bullets at crowds of thousands calling for the ouster of veteran President Ali Abdullah Saleh, killing at least 16 protesters and injuring hundreds, medics and witnesses said Thursday.

At the main demonstration in the capital, security forces and plainclothes gunmen shot dead 12 people in a bid to disperse protesters marching Wednesday from Sanaa University Square towards the government headquarters, medics and witnesses said.

And the toll may mount, with 10 of the 226 demonstrators wounded by gunfire in critical condition, while another 141 injured by sharp objects and batons and 735 suffering from tear gas inhalation, medical officials said.

Police shot dead two protesters in the southern city of Taez, and two others in the town of Dhamar and the city of Hudayda.

"People want to march to the palace" of Yemen's embattled president, the protesters chanted, in an apparent escalation of their 15-week push to oust Saleh who has been in office since 1978.

In Sanaa, security forces opened fire when the protesters got as close as 200 metres (yards) from the government building and the national radio, in what appeared to be an attempt to storm the council of ministers' premises.

The interior ministry said the protesters had attempted to break security cordons to "storm the radio (building) and government headquarters."

It added opposition gunmen positioned in a nearby building opened fire, claiming that it resulted in the death of one protester and wounding of others, the official Saba news agency reported late Wednesday.

"They aim to shed blood and cause casualties (among protesters) to exploit that in mobilising foreign public opinion," the ministry was quoted as saying.

Besides gunfire and tear gas, security forces also used hot water on protesters at Sanaa University Square, scolding at least 12 of them, according to the medic.

Armoured troops led by dissident General Ali Mohsen al-Ahmar had set a cordon around the University Square, dubbed "Change Square" since protests began, to protect camped-in protesters from a possible attack by loyal forces.

Also on Wednesday, security forces killed two protesters and wounded five others in Taez, bringing to seven the number of protesters killed since Sunday in Yemen's second largest city, according to a tally by medics.

Thousands of protesters took to the streets after the first protester was killed on Wednesday, marching towards several government offices in the city and forcing their closure, witnesses said.

They also marched towards the offices of Yemen Petroleum Company, locked its gate with chains and put up a banner saying: "Shut by the people."

The interior ministry denied there were any deaths in Taez.

A protester was shot dead in the Red Sea port city of Hudayda when police opened fire to break up a demonstration near the provincial headquarters, a medic and witnesses said.

Another protester was killed by police in Dhamar, 100 kilometres (60 miles) south of Sanaa, as security forces opened fire on a demonstration, medics and witnesses said.

The latest escalation came after neighbouring Gulf states urged all sides in Yemen to sign up to a transition plan aimed at ending the political bloodshed, by which Saleh would quit office in 30 days.

Saleh has stalled the deal by refusing to sign in his capacity as a president, insisting on endorsing the agreement as the leader of the ruling General People's Congress, contrary to the demands of the opposition.

The GCC plan proposes the formation of a government of national unity, Saleh transferring power to his vice president and resigning after 30 days, a day after parliament passes a law granting him and his aides immunity.

Around 170 people have been killed in anti-government protests since late January.