The Yemeni air force bombed an Al Qaeda-held southern city on Monday and residents in another city said soldiers had opened fire on a demonstration and run protesters over with bulldozers, killing at least 15. 

In the latest sign Saudi Arabia's neighbour was moving towards civil war, six soldiers were killed in what appeared to be an ambush near Zinjibar, a coastal city taken over a few days ago by Islamist and al Qaeda militants.   

Residents said jet fighters later strafed militant positions with bombs.

Global powers are worried the country, already on the verge of financial collapse and home to Al Qaeda militants, could turn into a failed state that threatens the oil-rich region of the Gulf.

A brief calm was shattered on Sunday when forces loyal to President Ali Abdullah Saleh opened fire on protesters in Taiz, killing at least 15 people and wounding hundreds, hospital sources said, adding the death toll was almost certain to rise.

'Most of the wounded were hit by live bullets, but some were run over by bulldozers,' a medical source said from a field hospital.   

Fresh protests are planned on Monday in Taiz, where Saleh's troops have burned tents used by demonstrators and parked armoured vehicles in a protest area known as 'Freedom Square'.

Security forces arrested dozens on Monday, trying to head off the rally demanding an end to Saleh's nearly 33-year rule.   

'Security forces are chasing youths in alleys after soldiers close down the city's entry points,' said pro-reform activist Boshra Al-Maqtari.

Opposition leaders have accused Saleh of allowing the city of Zinjibar, on the Gulf of Aden, to fall to Al Qaeda and Islamist militants in order to raise alarm in the region that would in turn translate into support for the president.

The six soldiers were killed and dozens wounded as they were travelling to Zinjibar, a security official and others said. The official did not know who was responsible for the attack.

'Civilians found a military car and an armoured vehicles. They were destroyed, and the bodies of six soldiers were found on the roadside,' Ayman Mohamed Nasser, editor-in-chief of Attariq, Aden's main opposition paper, said by telephone.

Several hundred Al Qaeda and Islamist militants took over the city a few days ago and have been battling locals and government soldiers for control.

Zinjibar residents told Reuters power and water had been cut off and many civilians were fleeing to nearby towns.

In Taiz, about 150 km (95 miles) to the northwest, police on Sunday night fired live ammunition and tear gas to disperse demonstrators outside a municipal building demanding the release of a fellow protester who was arrested on Saturday. - Reuters