The melee in the southern city of Taiz - part of an intensifying crackdown on the opposition - underscored the resolve of President Ali Abdullah Saleh to cling to power even as protest crowds resist withering attacks and crucial allies switch sides and call for his 32-year rule to end.

It also showed the challenges facing behind-the-scenes diplomatic efforts to quell the nearly two-month-old uprising in a nation that Washington considers a frontline battleground against al-Qaida's most active franchise.

"We will stand as firm as mountains," Saleh told a gathering of pro-government tribesmen.

In Taiz, witnesses described troops and gunmen, some on rooftops, firing wildly on thousands of protesters who marched past the governor's headquarters in the city's second straight day of violence. Some protesters - including elderly people - were trampled and injured as marchers tried to flee, witnesses said.

Saleh has been a key ally of the United States, which has given him millions in counterterrorism aid to fight al-Qaida's branch in the country, which has plotted attacks on American soil. So far, Washington has not publicly demanded that he step down. But the diplomatic efforts are a clear sign that the Americans have decided the danger of turmoil and instability outweighs the potential risks if Saleh leaves.

Mustafa al-Sabri, a spokesman for a coalition of opposition parties, said U.S. and European diplomats had been in contact with Saleh. They also asked opposition leaders for their "vision" for a transition.

In response, the opposition over the weekend gave the Americans a proposal that Saleh step down and hand his powers to his vice president, who would then organize a process to rewrite the constitution and hold new elections, al-Sabri said.

The six-nation Gulf Cooperation Council, which includes Yemen's neighbors Oman and Saudi Arabia, also offered to try to mediate a peace deal.

In Washington, State Department spokesman Mark Toner said American envoys "continue to consult intensively" with Yemen's government and the opposition, but he refused to give details of any specific U.S. plans.

Saleh has offered no hint of compromise as long as protests rage.

"We are prepared to explore the peaceful transfer of authority in the framework of the constitution. But arm-twisting will absolutely not work," he said on Sunday.

On Monday, he showed an even harder edge. "We are standing firm, and we will defend constitutional legitimacy by all means," he told backers. "We will stand as firm as mountains and will remain faithful to the people."

Saleh has offered to step down early at the end of this year if a transfer of power acceptable to him is reached. But the opposition fears that Saleh is using the discussions over stepping down to stall for time - either to stay in power or to ensure he is succeeded by one of his sons.

The U.S. Embassy has not commented on any diplomatic efforts, saying only in a statement over the weekend that "Saleh has publicly expressed his willingness to engage in a peaceful transition of power; the timing and form of this transition should be identified through dialogue and negotiation."

The opposition has been holding continual protest camps in main squares of the capital, Sanaa, and other cities around the country, and hundreds of thousands turned out for the biggest and most widespread marches yet on Friday. At least 97 people have been killed since demonstrations began Feb. 11.

The violence in the mountain city of Taiz began when thousands of protesters marched down its main street toward Freedom Square, where demonstrators have been camped out, surrounded by security forces.

As the march passed the governor's headquarters, troops stationed there blocked the procession and clashes broke out with some protesters throwing stones, witnesses said.

Troops from the Republican Guard and the military police on nearby rooftops opened fire on the crowd and the marchers then turned to besiege the governor's headquarters, said Bushra al-Maqtara, an opposition activist in Taiz, and other witnesses.

"It was heavy gunfire from all directions. Some were firing from the rooftop of the governor's building," said one protester in the crowd, Omar al-Saqqaf.

At least 12 protesters were killed, said Hamoud Aqlan, a medical official at a clinic set up by protesters. Dozens more were wounded by gunshots, mainly to the head, neck and chest, he said. A medical official said another two demonstrators died of their wounds later.

The military has clamped down on the city of nearly half a million, about 120 miles (200 kilometers) south of the capital. For a second day, tanks and armored vehicles blocked entrances to the city to prevent outsiders from joining the protests. They also surrounded Freedom Square, bottling up the thousands in the protest camp there and arresting anyone who tries to exit.

Saleh's top security official in Taiz, Abdullah Qiran, is accused by demonstrators of orchestrating some of the most brutal crackdowns against demonstrators, particularly in the southern port town of Aden. On Sunday, police attacked a march by thousands of women in Taiz, sparking a battle with a separate group of male protesters.

Marches in solidarity with the Taiz protesters erupted in several cities, including in the capital Sanaa and the city of Hudayda, where snipers opened fire on demonstrators, killing one man, critically injuring another and wounding dozens of others, medics said.