Yemen's ruling party recommended forming a new government to draft a new constitution based on a parliamentary system in line with reform offers by President Ali Abdullah Saleh, state media said on Sunday.
"Members of the central committee of the People's Congress stress the quick need to form a government tasked with drafting a new constitution for the country on the basis of a parliamentary system," the news website of the defense ministry said.
But later on Sunday, an aide to a top general who has sided with protesters reported that the negotiations on a transition of power from Saleh had stopped and were not immediately expected to resume.
A spokesman for Yemen's main opposition coalition also said the talks had been halted.
Saleh had said on Friday that he was ready to cede power to stop more bloodshed in Yemen, but only to what he called "safe hands," after weeks of street demonstrations demanding his immediate ouster.
Saleh came under mounting pressure to resign after snipers firing from rooftops killed 52 protesters over a week ago after Friday prayers, triggering a string of defections including that of a top general.
Saleh is a key ally of the United States in battling al-Qaida in the Arabian Peninsula, which the Obama administration considers the top terrorist threat to the U.S.
Washington is concerned that the cooperation could be imperiled if Saleh departs, and U.S. diplomats sat in on the political talks last week that failed to make progress on a possible transition of power.
"We have had a lot of counterterrorism cooperation from President Saleh and Yemeni security services. So if that government collapses or is replaced by one that is dramatically more weak, then I think we'll face some additional challenges out of Yemen," said U.S. Defense Secretary Robert Gates on ABC TV's This Week. "There's no question about it. It's a real problem."
Saleh himself warned that Yemen is a ticking bomb in a TV interview on Saturday night and said that without him in power, the country would descend into civil war.
The protesters behind weeks of demonstrations are demanding Saleh step down immediately and want a ban on future government positions for him and his family.
Saleh has offered a string of concessions, all rejected by opposition parties, including last week's offer to transfer power after the drafting of a new constitution and parliamentary and presidential elections by the end of the year.