Yemen's President Ali Abdullah Saleh will not return to the country from Saudi Arabia where he is staying and will transfer powers to the vice president in 10 days, a Western diplomat told the German Press Agency dpa on Friday.
The diplomat, who has close contacts to Saudi officials, added that Saleh would remain in the Saudi capital Riyadh where he is recovering from injuries he sustained in an attack on his palace in Sana'a in June.
"A Saudi-brokered deal has been reached with Saleh, which stipulates that the Yemeni president will sign the transfer of power to his deputy Abdo Rabo Mansour Hadi within ten days," said Lebanon-based diplomat who declined to be named.
On Thursday, the US State Department said they had seen "encouraging signs" in recent days from the Yemeni government and the opposition, suggesting a renewed willingness to implement a political transition.
Meanwhile, hundreds of thousands of demonstrators took to the streets across Yemen's 17 provinces on Friday, to protest against government violence and reiterate calls for Saleh to step down.
In the southern city of Taiz, huge crowds marched from the Taghyeer square - which has been the focal point of protests - to the Directorate of Security, denouncing the violence and shelling by government forces within the city, a local activist said.
On Thursday, security forces opened fire at demonstrators, injuring more than 50 people, said an activist who only identified himself as Abdel-Rahim.
One died shortly afterward from injuries sustained in the clashes. Activists said he had bullet wounds in his body.
The violence continued until the early hours of Friday, as government forces fired live ammunition and tear gas canisters at the protesters.
Taiz is Yemen's second largest city and a flashpoint of the anti-Saleh protests that have gripped the country since February.
On Thursday, two people were also killed in the capital and one in the port city of Aden, bringing the day's total casualties to four.
At least 450 people have been killed in the government crackdown against protesters since the demonstrations started, according to human rights advocates.
An agreement hammered out by the Gulf Cooperation Council to end the unrest in Yemen calls for Saleh to resign 30 days after the pact is signed.
Saleh, who has been in power since 1978, has been refusing to leave power despite protests and a tribal uprising that began in February and have almost brought the country to a civil war.