President Ali Abdullah Saleh returned to Yemen on Friday after three months in Saudi Arabia recovering from an assassination attempt and was greeted by the sound of gunfire and explosions across the capital.
Saleh's return, first reported by state television and confirmed by Reuters, raises the risk of all-out civil war in the volatile Arabian Peninsula country.
Violence in the capital of Sanaa, which had been escalating this week as loyalist troops clashed with forces backing a mass protest movement, is expected to intensify with Saleh's return.
"We're definitely going to have an escalation of violence, but let him come back," said Mohammed al-Asl, a protest organiser. "We want him to come back and be tried for his crimes."
Yemeni state television reported his return, saying, "Ali Abdullah Saleh, President of the Republic, returned this morning to the land of the nation safely after a trip for treatment in Riyadh that lasted more than three months."
Within minutes of the announcement, loud bursts of gunfire and explosions were heard echoing through the capital. There were also fireworks.
The death count from five days of violence has crept up to more than 100. Since the revolt against Saleh began eight months ago, about 450 people have been killed.
Protesters are expected to flow onto the streets of the ancient capital of Sanaa during Friday prayers, demanding an end to Saleh's 33-year rule.
The United States, Saudi Arabia and other powers fear al Qaeda's Yemen wing could exploit the growing lawlessness in the nearly failed state. Al Qaeda militants have already seized cities in a Yemeni province just east of a key oil shipping channel in recent months.
"This is an ominous sign, returning at a time like this probably signals he intends to use violence to resolve this. This is dangerous," said Abdulghani al-Iryani, a political analyst and co-founder of the Democratic Awakening Movement.
"His people will feel that they are in a stronger position and they will refuse to compromise. Basically this means the political process is dead in the water."
All week, gun battles and shelling between state troops and soldiers backing the protest movement shook areas near "Change Square", the name demonstrators have given the street where thousands have camped out for eight months.
Protesters, inspired by uprisings across the Arab world, marched into parts of the city controlled by pro-Saleh forces on Sunday and were met by heavy gunfire. The clashes escalated when troops loyal to army defector General Ali Mohsen joined in on the side of the protesters.
Heavy explosions and gunfire were heard in Hasaba on Thursday, a neighbourhood of Sanaa where the powerful anti-Saleh tribal leader Sadeq al-Ahmar lives, residents said.
Snipers said to be lurking on the upper floors of buildings killed four protesters and wounded at least 14 around Change Square, a doctor at the square's clinic said. Angry protesters set fire to a house where they believed snipers were hiding, while medics set up a blood donation campaign for the wounded.
A guard at the house of an opposition figure also died when Saleh loyalists bombarded his house.
Negotiations on a peaceful transfer of power have stalled, and the UN's Yemen envoy said the country on the south end of the Arabian Peninsula would be torn apart unless a political solution is reached soon between Saleh's camp and his foes.
Before his return, Saleh had been in nearby Saudi Arabia since June recovering from wounds suffered in a June assassination attempt, leaving Yemen in a tense political limbo.
Diplomats and analysts had been pushing for a transfer of power plan, which they said Yemeni politicians were just days away from finalising when the latest fighting erupted.
Saleh has on three occasions backed out of a plan brokered by Gulf neighbours for him to step down. Yemenis eager to get on with their lives said they feared that negotiators did not have much time left before violence spiraled out of control.
A truce called by Yemen's vice president earlier this week broke down in just a matter of hours, highlighting the need for a political breakthrough.
Gulf Cooperation Council Secretary General Abdbullatif al-Zayani flew into Sanaa this week to try and resurrect the deal, but left after two days with nothing to show for his efforts.