Ali Abdullah Saleh, Yemen's president, is to announce a government of national unity "within the next 24 hours", government sources have told Al Jazeera.
The move comes as thousands more protesters joined demonstrations against Saleh's 32-year rule on Monday.
Hashem Ahelbarra, Al Jazeera's correspondent in Yemen, said: "It's a last ditch effort to try and appease the mounting tension here in the capital and across the country.
"Al Jazeera understands that President Ali Abdullah Saleh has had a crucial meeting with the clerics of Yemen in the presidential palace and he told them that within 24 hours from now he will announce a national unity government.
"He reportedly said that even if the opposition decides not to join him in this government, he will contact independent personalities and invite them to join this national unity government that would lay down the groundwork for dramatic constitutional reforms."
The opposition appeared likely to reject any offer from Saleh.
"The opposition decided to stand with the people's demand for the fall of the regime, and there is no going back from that," Mohammed al-Sabry, a spokesman for Yemen's umbrella opposition coalition, was reported by the Reuters news agency as saying.
'Stalemate'
Protests against Saleh, a US ally in its fight against al-Qaeda, have spread across the impoverished Arabian Peninsula in the last month.
In the northern cities of Ibb and Hudeida on Monday, thousands of protesters gathered, while at least 10,000 took to the streets in Taiz, 200km south of the capital.
Shadi Hamid, from the Brookings Doha Centre, told Al Jazeera that Yemen was a "powder keg", and that Saleh's stalled response to the protesters' demands had done little to help the situation.
"It really seems that the protesters have the momentum. This is the problem - when regimes wait, and they don't really initiate real democratic reform, the demands of the protesters become more and more," he said.
"Now we're really at a stalemate. The protesters are very clear, they want Ali Abdullah Saleh to resign, [and] Ali Abdullah Saleh does not want to resign."
The developments in Yemen came as violence spiked against security forces in the south of the country.
Local officials said gunmen killed two soldiers in successive attacks, and a prison riot killed one inmate and wounded two guards as four prisoners escaped.
Source:
Al Jazeera and agencies
