* Despite public stance, Saleh has no plans to step down
* Seems ready for civil war rather than relinquish power
* Western, Arab powers urged to ratchet up pressure
By Samia Nakhoul
SANAA, June 1 (Reuters) - To his U.S., British and Gulf mediators and benefactors, Yemeni President Ali Abdullah Saleh says he is ready for a peaceful exit from power.
To his close circle of aides he sneers at a Western-backed agreement to end his 33-year reign.
On the ground, he is engaged in a war with the country's most powerful tribe. And those of us who have met him in the past week are left with the clear impression he has no plans to step down, or to relinquish power willingly.
A master with words, he talks about the future of Yemen with the confidence of a leader with every intention of staying.
The protest movement by millions of Yemenis who have risen up since January, inspired by the Tunisian and Egyptian revolts, has become a sideshow to fighting between Saleh's forces and the Hashed, a tribal confederation led by the al-Ahmar family.
Army officers, presidential guard units, tribal sheikhs, clerics and politicians have defected to the opposition. The most powerful and senior military defector is General Ali Mohsen, who has deployed his First Armoured Division to protect pro-democracy protesters in the capital, Sanaa.
When confronted with persistent demands that he accept a deal, brokered by Gulf Arab states, under which he would resign and allow a peaceful transition, Saleh has, according to several sources, responded to close associates with a hint of menace:
"I will leave Yemen as I found it," he has said.
What the 69-year-old president appears to mean is that he would leave Yemen not only as illiterate, destitute and backward as he inherited it when he took over from his assassinated predecessor in 1978 but also fractured by a civil war similar to the two wars that engulfed the country of 23 million before him.
"He has the power to wreak havoc," said a senior Western diplomat based in Sanaa, adding that the opposition as yet lacks the strength to overthrow him. "Saleh has ruled by force and will continue to rule by force," he said. "The only threat for him is force, and it hasn't reached that yet."
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HOLDING ON
Another source familiar with Saleh's thinking said: "He will never leave power or sign the deal unless he is forced to."
The president's close relatives, who control Yemen's most lucrative sources of revenue and state assets, are pressuring him not to give up power, this source added.
Several diplomats and officials with knowledge of the president's negotiations and policies spoke only on condition they were not identified. Some declined to be quoted in any way.
Every time negotiators have thought they had sealed a deal and that Saleh was finally about to sign his own exit from office, he has sidestepped his departure by imposing additional conditions. This has gone on for over two months.
In that time, negotiators shuttled back and forth to tailor details to meet Saleh's requests -- from the very title of the agreement, to who would sign it first, from providing for immunity from prosecution for him and his family to accepting his veto on having certain opposition figures as signatories.
When the intermediaries, including U.S., British and Gulf diplomats, concluded two weeks ago that every eventuality had been covered except the actual signing, Saleh surprised them by demanding yet another condition -- a public signing ceremony at the presidential palace, to be attended by the opposition.
The opposition refused. "This was not part of the agreed process," the senior Western diplomat said. "The fact is that Saleh has agreed to the process and reneged on it."
Adding insult to injury for the negotiators, gunmen loyal to Saleh surrounded the United Arab Emirates embassy in Sanaa on May 22, the day the signing had been planned. The lead Gulf mediator, the U.S. ambassador and several European envoys were trapped for hours and were finally evacuated by helicopter.
Negotiations are now effectively on hold.
CONFLICTS AND VIOLENCE
Under fierce international criticism for his behaviour in going back on his promise to quit, Saleh immediately moved his forces against the Ahmars, turning a political crisis into violence that has brought civil war closer.
Then his supporters announced on Sunday that Islamist militants had seized control of the southern coastal town of Zinjibar. Though the militants there are not clearly linked to al Qaeda, Saleh has long used his opposition to al Qaeda to secure support from foreign allies fighting the jihadists.
Yet less than the threat of Islamist takeovers in more cities, it is Saleh's widening war with the Ahmar family in the capital, Sanaa, that, close associates say, shows how determined he is to stay in power, even at the price of civil war.
"For us in the international community, we see the demonstrations in Taiz, Sanaa and elsewhere as part of the popular protests," the senior Western diplomat said. "For the Salehs, from the very beginning it has been about the Ahmars, a battle of wills between themselves and the Ahmars."
The fighting, which turned more violent on Tuesday after a two-day ceasefire broke down, is starting to look like civil war. Within a few hours the Ahmar tribe occupied several ministry buildings, including the interior and trade ministries.
"His (Saleh's) position is considerably weaker today than it was a week ago," the senior Western diplomat said. "Positions have hardened against him. Therefore I would say that his ability to hang on is less today than it was weeks ago."
Mediators still want to believe that Saleh will choose to step down quietly by agreeing to what they describe as the "best conceivable deal" an Arab autocrat can get -- it would spare him the fates of: Zine al-Abidine Ben Ali, who had to flee Tunisia; of Hosni Mubarak of Egypt, now facing trial; of Muammar Gaddafi, under NATO bombardment in Libya; and of Bashar al-Assad, whose Syria is under increasingly tough international sanctions.
"He has to take one decision which is to sign the deal," a senior European diplomat said. "No other deal will include immunity. The delay is not in his interest.
"The deal won't be there forever. There will be very severe international reaction if there is further bloodshed, killing of civilians and violence."
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