At least 18 people were killed and scores more wounded in gun battles that erupted Monday in the Yemeni capital of Sana’a after the dictator Ali Abdullah Saleh reneged on a deal to step down.

Saleh had pledged to accept an agreement Sunday after it had been brokered by the Gulf Cooperation Council (GCC), the group of oil-rich monarchical dictatorships led by Saudi Arabia. But employing a combination of pretexts and provocations, he refused to sign the deal.

Monday’s fighting erupted between troops loyal to Saleh and militiamen protecting Sheikh Sadeq Al Ahmar, the leader of the Hashid tribe—Yemen’s largest—who cast his lot with the opposition, despite Saleh’s being a member of the tribe.

The militiamen apparently responded to what they perceived as a threat from Interior Ministry troops occupying a schoolyard near Sheikh Ahmar’s compound. The subsequent fighting saw exchanges of automatic weapons fire, rocket-propelled grenades, and the use by the militiamen of anti-aircraft missiles. The militiamen occupied some government buildings, while the Interior Ministry was reported to be on fire.

Under the terms of the GCC-brokered agreement, Saleh was to have handed over power to his vice president, allowing the formation of a transitional government to be headed by an opposition party prime minister. In return for becoming the third Arab head of state to be toppled this year, he and his relatives would be granted immunity from prosecution and allowed to keep the fortune he has amassed after nearly 33 years in power.

The aim of the six-member GCC—Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman—backed by Washington, is to quell the mass social uprising that has gripped the country for more than four months, while preserving the regime, minus its leader, Saleh.

But Saleh, a longtime stooge of Washington, has proven recalcitrant. His refusal to sign the GCC agreement Sunday marked the third time he has backed out of the deal since it was first worked out last month.

He prepared his action Sunday with an orchestrated demonstration of armed supporters that laid siege to the United Arab Emirates embassy in Sana’a, trapping inside the GCC negotiator as well as the US and European ambassadors. They had been scheduled to go to the presidential palace for a signing ceremony. Initially it was reported that they had to be evacuated by military helicopters. It later emerged that the helicopters were sent, but the diplomats were ultimately driven out of the compound after security forces finally dispersed the demonstration.

The day before, Saleh had delivered a nationally broadcast speech in which he denounced the GCC plan as a “coup,” warned that his departure would leave the country to be taken over by Al Qaeda, and accused the opposition of working on behalf of foreign powers bent on destabilizing Yemen.

On Sunday, at the last minute he refused to initial the deal, demanding that the opposition parties, which had signed the agreement in a secretive meeting the day before, do so again publicly.

He then made another speech charging the opposition with leading the country into a civil war.

“If they remain stubborn, we will confront them everywhere with all possible means,” he said. “If they don’t bow, and want to take the country into a civil war, let them be responsible for it and for the blood that was shed and that will be shed if they insist on their stupidity.”

The GCC negotiator left the country, with the council declaring that the conditions did not exist for pursuing the settlement.

Saleh’s refusal to sign the agreement was met with a stern rebuke from Washington. “President Saleh is now the only party that refuses to match actions to words,” US Secretary of State Hillary Clinton said late on Sunday. “We urge him to immediately follow through on his repeated commitments to peacefully and orderly transfer power and ensure the legitimate will of the Yemeni people is addressed. The time for action is now.”

President Barack Obama included an appeal to the Yemeni head of state in his “Arab Spring” speech delivered at the State Department last Thursday. “If America is to be credible, we must acknowledge that our friends in the region have not all reacted to the demands for change,” the US president said. “President Saleh needs to follow through on his commitment to transfer power.”

Washington’s attempt to portray the deal brokered by the kings and emirs of the GCC as a realization of the “will of the people” and “demands for change” is utterly cynical.

Hundreds of thousands demonstrated across the country on Friday and Saturday not only to demand Saleh’s ouster, but also to denounce the GCC agreement and to demand an end to the interference of the Saudi monarchy and the Gulf emirates in Yemen’s affairs.

This mass movement has been driven not only by hatred of Saleh, but by profound social unrest and mass dissatisfaction with prevailing conditions in Yemen, the poorest country of the Arab world, where half the population subsists on less than $2 a day, and the unemployment rate is over 40 percent.

The young workers and students who began the demonstrations increasingly are protesting that this movement is being hijacked by political forces that represent not their interests, but those of one or another section of the country’s social elites.

The opposition political parties—including the Islamist Islah, Yemen’s equivalent of the Muslim Brotherhood—did not declare their support for the popular upheavals until the end of March, two months after the mass demonstrations began.

Their aim, like that of Washington and the Gulf states, is to wind down this mass movement as quickly as possible and stabilize Yemen’s crisis-ridden bourgeois regime.

Wassim al-Qershi, one of the youth leaders, denounced the agreement signed by the opposition and rejected by Saleh. “The Gulf initiative is a way out for the president, and not a solution for Yemen,” he said. “We want the president and his aides to be tried.”

The US-backed Yemeni regime has carried out ferocious repression against the demonstrators, killing an estimated 200. In addition to responding to unarmed protests with live ammunition, the regime has employed detention without charge for political opponents and tortured with impunity.

The Obama administration has backed Saleh until recently, when it concluded that the regime can survive only with his ouster. Over the past five years, Washington has funneled some $300 million in military aid to the Yemeni regime’s security forces. While in 2008, the last year of the Bush administration, this aid amounted to $17.2 million, by 2010, under Obama, it had more than quadrupled to $72.3 million, providing ample supplies for the suppression of the mass struggles of the Yemeni people. The White House has also provided extensive training for counter-terrorism units, which are now being employed against unarmed demonstrators.

While Washington, like Saleh, has claimed that the danger in Yemen is that the local affiliate of Al-Qaeda—Al-Qaeda in the Arabian Peninsula (AQAP)—will be able to expand and operate with impunity, the real fear is that social revolution in Yemen, a country of 23 million people, could ignite the entire Persian Gulf, endangering US control of the region’s vast oil reserves.

Meanwhile, social unrest has paralyzed Yemen’s economy. Strikes by oil workers, the bombing of pipelines, and the departure of foreign technicians bringing oil production, which accounts for 70 percent of the government’s revenue, have brought the economy to a virtual standstill. Strikes have also hit port facilities and other sectors of the economy.

Yemeni Oil Minister Amir el-Aydarus warned that the country is facing “imminent economic collapse.” He said, “If the problem persists, the government will be unable to meet the minimum needs of the citizens.” For a large sector of Yemen’s population, however, this has long been the case.