Yemen's president has dismissed his government and promised to review fuel subsidy cuts in a bid to end a stand-off with Zaidi Shia rebels, BBC reported.
Abdrabbuh Mansour Hadi would name a new prime minister to form a national unity administration, state media reported.
However, the initiative was rejected by the rebels, who are known as Houthis.
Thousands of their supporters have been holding protests across the country for weeks, calling on the government to be dissolved and the subsidies restored.
The Houthis have staged periodic uprisings since 2004 in an effort to win greater autonomy for their northern heartland of Saada province.
They consolidated control over Saada during the 2011 uprising that forced long-time President Ali Abdullah Saleh to step down, and since July have inflicted defeats on tribal and militia groups backed by the leading Sunni Islamist party, Islah, in neighbouring Amran province.
In mid-August, the Houthis' leader Abdul Malik al-Houthi demanded that President Hadi reverse a decision taken in July to remove subsidies that had hit the country's poor and that he replace the "corrupt" government with a body that better represented Yemen's various factions.
Since then, thousands of supporters have taken part in sit-ins in front of government buildings in Sanaa and demonstrations in the city's Change Square, where a protest camp was set up during the 2011 uprising.
On Sunday, Mr Houthi called for a campaign of civil disobedience and the expansion of protests. He warned: "If our demands are not met there will be decisive measures that we will talk about in time."
Bakudaily.Az
