Thousands of Yemenis took to the streets of Sanaa on Thursday to demand a change of government, inspired by the unrest that has ousted Tunisia's leader and spread to Egypt this week.

"The people want a change in president," shouted protesters who gathered at Sanaa University for one of the demonstrations scattered across the city, in the largest of a wave of anti-government protests.

President Ali Abdullah Saleh, a key ally of the United States in a war against a resurgent Yemeni arm of al Qaeda, has ruled the impoverished Arabian Peninsula state for over 30 years.

At least 10,000 protesters gathered at Sanaa University and around 6,000 more elsewhere in Sanaa in protests organised by Yemen's opposition coalition, Reuters witnesses said. Police watched but no clashes were reported.

Protesters said they were demanding improvements in living conditions as well as political change. One banner read: "Enough playing around, enough corruption, look at the gap between poverty and wealth."

A competing pro-government protest organised by Yemen's ruling party in another district of Sanaa gathered a few hundred demonstrators, witnesses said.

At least 100 troops from Yemen's security forces spread across a square where many banks are located, though there were no protesters there, a Reuters witness said.

Yemen, in the shadow of the world's top oil exporter Saudi Arabia, is struggling with soaring unemployment and dwindling oil and water reserves. Almost half its 23 million people live on $2 a day or less, and a third suffer from chronic hunger.

"We are partners in this nation and we won't submit to exclusion. Look at Tunis and what it did. Yemen's people are stronger," protesters chanted at the university protest.

Saleh has tried to calm discontent, last week proposing constitutional ammendments including presidential term limits with two terms of five or seven years.

This week he also promised to raise the salary of all civil servants and military personal by at least $47 dollars a month.

Yemen, plagued by separatist rebellion in the south and trying to cement a fragile truce in the north, is also struggling to stamp out a resurgent wing of al Qaeda that has based itself in Yemen.