Around 30 bodies were laid out in neat rows and the square near Sanaa University overflowed with mourners, who massed under tight security and despite a two-day-old state of emergency.
The victims were killed Friday when pro-Saleh gunmen raked demonstrators in the square with bullets from surrounding rooftops, in an attack which more than doubled the death toll from a month of violent unrest to around 80.
"These people must be held responsible for every drop of blood that has been shed," said Ali Abed Rabbo al-Qadi, the head of the independent parliamentary bloc, who was among those gathered for the funerals.
Muslim clerics called on Yemeni soldiers to disobey orders to shoot demonstrators, and blamed Saleh -- in power since 1978 -- for the slaughter on Friday.
"We call on the army and security forces to not carry out any order from anyone to kill and repress" demonstrators, a group of influential clerics in the deeply religious country said in a joint statement.
They also called for Saleh's elite Republican Guard troops to be withdrawn from the capital, where protesters have defied the state of emergency called after Friday's violence and continued a sit-in.
Saleh had declared Sunday a national day of mourning for the "martyrs for democracy," while blaming the opposition for "incitement and chaos" that had led to the killings.
Youth activists organising the sit-in panned Saleh's declaration as insincere. "After getting blood on his hands... he cried crocodile tears for the martyrs," they said in a statement.
The opposition says the president -- a key US ally in the war against Al-Qaeda in the region -- must resign this year but he has refused to leave until his current term expires in 2013.
He has also offered to devolve power to parliament under a new constitution, a pledge rejected as "too late" by the opposition which says the president cannot be trusted to honour his promises.
Human rights minister Huda al-Baan announced late on Saturday that she was resigning in protest at Friday's bloodbath, where the undersecretary at her ministry, Ali Taysir, has also stepped down.
Baan became the third Yemeni minister to quit in as many days, along with a host of senior officials and at least two ambassadors.
Friday's carnage followed repeated US appeals for restraint and respect of human rights in the impoverished country, which is also struggling to contain a southern secessionist movement and a Shiite revolt in the north.
US President Barack Obama strongly condemned the crackdown and called on the key US anti-terror ally to live up to its pledge to allow peaceful protests.
"Those responsible for today's violence must be held accountable," he said on Friday.
Western diplomats have repeatedly issued similar calls since violence erupted a month ago.
Saleh has promised to protect the right to peaceful assembly, but as the death toll soars he seems unable or unwilling to honour his pledges.
Rights activists have said the United States should reconsider its military aid to Yemen, where US special forces troops are helping to train local anti-terror units engaged in the fight against Al-Qaeda's Yemen-based offshoot.
Al-Qaeda in the Arabian Peninsula is allegedly behind several attempted attacks against the United States.
Yemen is also the suspected hideout of radical US-Yemeni cleric Anwar al-Awlaki, an alleged AQAP leader and described by a senior US security official as "probably the most significant risk" to the United States.
A Bangladeshi Islamic militant working for British Airways was jailed for 30 years on Friday for plotting to blow up a plane after conspiring with Awlaki.