President Saleh has avoided another civil war so far, but has not calmed the large number of Yemenis calling for reform (more jobs, less corruption.) The big problem with the opposition is the tribal nature of Yemeni politics. While many tribal chiefs have withdrawn support for Saleh, they have not declared war on Saleh. The tribal chiefs are waiting to see how much the unrest (going into its sixth week) can weaken the president, who is still a formidable deal-maker. Saleh has promised a new constitution, and to leave office, all by 2013. That has kept some people from the streets, but the crowds at pro-reform demonstrations continue to grow larger. It's an endurance contest.
In neighboring Saudi Arabia, efforts to get reform demonstrations going have had little success. The king and the royal family have used the trillions in oil wealth (over the last 70 years) better than most other oil producers. While members of the royal family have provided decades of amusement with wasteful and outrageous spending, enough of the cash has been passed around to make most Saudis comfortable. More importantly, the Saud family has created a sense of nationalism in the last 21 years (starting with the Iraq invasion of Kuwait). That's important in a nation founded on tribal coalitions (that are still important). The growing power of Iran, and their calls for Shia clerics to run the Moslem holy places at Mecca and Medina, have united Saudis like never before. This was demonstrated when al Qaeda went to war with the Saud family after the U.S. 2003 invasion of Iraq. The terror group lost, because very few Saudis sided with them.
Iran has been urging the Shia minorities across the Gulf to keep protesting, and assured the Shia majority in Bahrain that Bahraini independence would be respected. But most Shia Arabs don't trust Iran, and this has weakened the Arab Shia reform movement (because of this ancient split among Shia).
The U.S., and most other Western nations, have warned their citizens to stay away from Yemen until things settle down.
March 10, 2011: President Saleh proposes to change the constitution to implement a parliamentary system (in which the president has little power and a prime minister can be removed by a majority of members.) Saleh has ruled the country for 32 years via a presidential system, where the president is elected for a fixed term and cannot easily be removed by a weaker parliament. Saleh has used his skill in making deals with tribal chiefs to prevent anyone from putting together a coalition that could remove him. No clear leader has emerged from the current demonstrations, but Saleh has lost the support of many, if not most, of the tribal chiefs that are the core of his support.
March 8, 2011: In the capital, over 80 students are wounded and one killed when police opened fire on protestors in front of the university. Another 60 were injured (40 prisoners and 20 police) at the main prison as prisoners (including many civilians arrested for demonstrating) rioted.
March 6, 2011: Some 25 protestors were injured when attacked by a crowd of government supporters.
East of the capital, al Qaeda gunmen fired on an army truck, killing four soldiers. There has been sporadic contact with armed al Qaeda members, as the terrorist group appears to be keeping a low profile during the unrest. Al Qaeda sees an opportunity to get a new government that is less hostile to them.