In Sanaa, Yemeni government troops opened fire on tens of thousands of protesters killing one person and wounding at least 40 others, medics said.
The protesters were marching towards the capital's Al-Qaa district, an area controlled by pro-Saleh troops, when they were fired upon with live ammunition, witnesses said.
Medical officials said at least 40 people suffered bullet wounds while dozens of others were treated for tear gas inhalation.
Fierce clashes between government troops and forces who defected in support of the pro-democracy protesters later erupted just north of Change Square, the epicentre of nation-wide movement calling for Saleh's resignation.
Violence in the capital has escalated in the wake of a non-binding UN Security Council resolution urging Saleh to sign a Gulf-brokered deal that paves the way for his resignation.
On Monday, Saleh welcomed the resolution but has so far refused to sign the agreement, despite increased regional and international pressure to do so.
Meanwhile, in Yemen's second largest city Taez, four civilians died and at least seven others were wounded in shelling and clashes between armed tribesmen who back the anti-government protesters and pro-Saleh troops, medics said.
Witnesses have described scenes of fear and chaos as mortar shells fell randomly on city neighbourhoods, damaging dozens of houses and forcing schools to shut down.