Yemeni President Ali Abdullah Saleh has said there could be a civil war in Yemen because of attempts to stage what he called a coup against his rule.
"Those who want to climb up to power through coups should know that this is out of the question. The homeland will not be stable, there will be a civil war, a bloody war," he said.Army officers expressed their support for pro-democracy protesters on Monday.
Armoured vehicles from both sides are on the streets.
Two soldiers reportedly died on Tuesday in clashes between the army and the elite Republican Guard in the south-eastern city of Mukalla.
Key Yemeni General Ali Mohsen al-Ahmar, long close to President Saleh, on Monday said he was backing the protesters.
Two other senior army commanders were also reported to have resigned.
There have been weeks of anti-government protests in Yemen.
President Saleh's authority has been further undermined by a string of other resignations since some 50 protesters were shot dead at a demonstration in the capital, Sanaa, on Friday.
The president has remained defiant in the face of protests, with a source close to him telling the CA on Monday that the president would not stand down - and would call elections later in the year.
On Sunday, he fired his entire cabinet in apparent response to protests against his rule. He asked them to stay in place in a caretaker capacity.
Yemen is one of a number of countries in the region that have seen unrest since the presidents of Egypt and Tunisia were ousted in popular revolts.
The president has been in power for 32 years, facing a separatist movement in the south, a branch of al-Qaeda, and a periodic conflict with Shia tribes in the north.
He has said he will not seek another term in office in 2013, but has vowed to defend his regime "with every drop of blood".
In Moscow on Tuesday, US Defence Secretary Robert Gates said he was concerned about instability in Yemen and feared political unrest in the country could distract from efforts to fight Yemen-based al-Qaeda in the Arabian Peninsula, which the US considers a terror group.
But Mr Gates declined to say whether the US thought President Saleh should step down from power.
"I don't think it's my place to talk about internal affairs in Yemen," he was quoted as saying by Reuters news agency.