One protester was killed and around 500 were injured or asphyxiated Sunday when Yemeni police attacked anti- government protesters in the southern province of Taiz, dpa reported.
Police used tear gas and fired bullets in the air as they tried to disperse the demonstrators.
Local media said the protester was shot dead as demonstrators marched towards the main government building in the province.
The state-run news agency denied that anyone was killed, but reported that eight policemen were injured when protesters clashed with police.
An eyewitness told the German Press Agency dpa that police used expired tear gas and that government loyalists attacked the protesters.
The attack comes after Yemen's opposition coalition, the Joint Meeting Parties (JMP), unveiled a plan to end the unrest that has gripped the country for more than a month.
Published late Saturday, the JMP scheme would see President Ali Abdullah Saleh step down and his powers be transferred to the vice president.
A provisional national council would be created, with the opposition leading an interim national unity government.
The right to peaceful protest and demonstration would be guaranteed, with a supreme commission overseeing all elections and referendums.
Mass demonstrations of thousands of anti-Saleh protesters took place in the capital, Sana'a, and other provinces on Saturday.
JMP said this plan would be the "last option" for Saleh to ensure a smooth and honourable transfer of power.
Security forces have repeatedly attacked protesters calling for Saleh's ouster, with at least 52 dead and hundreds injured so far.
"The JMP are responsible for all this bloodshed, they are behind this crisis, and they are responsible for causing panic and unrest among citizens," Saleh said on Saturday.
Demonstrations began in Yemen in February, following popular uprisings against long-time rulers in Tunisia and Egypt.
President Saleh has been in power since 1978 and is a key US ally.