After more than four months of often deadly anti-government protests, and with President Ali Abdullah Saleh still officially in power, the economic situation has become so bad that an outbreak of large scale and violent looting could take place in a matter of weeks.
Tensions ready to boil over into renewed clashes in Yemen
It's tempting to think that the situation in Yemen cannot get any worse.
There have been more than four months of often deadly anti-government protests. The country's longtime president was seriously wounded in an attack blamed on political rivals. Al Qaeda militants seized a provincial capital. Poverty is widespread and prices are soaring. And before the anti-government protests erupted, a secessionist movement had been growing in the south while Shiite rebels revolted in the north.
Bashir Al Sayed, a Yemeni analyst for the Al Nedaa newspaper., said: "The economic situation has become so bad as a result of the political unrest that an outbreak of large scale and violent looting could take place in a matter of weeks. Similarly, rival forces in the capital appear to be gearing up for renewed clashes."
Tens of thousands celebrated President Ali Abdullah Saleh's departure on June 5 to seek medical treatment for injuries he received an attack on his Sana'a compound two days earlier. People danced, sang, slaughtered cows and waved the country's flag at the central Sana'a square that has served as the focus point for the protests demanding the president's removal since February.
But Mr Saleh, whose political acumen and opportunism have secured him nearly 33 years in power, appears to have had different plans that, if successful, could ensure he returns to either cling to power or oversee a transfer of power that secures him and his family immunity from prosecution.
Back in Sana'a, the president left his son Ahmed, two nephews and a half-brother in charge. Between them, the four command the country's top military units.
It was an ominous move. The loyalty of the four to the president are beyond question and their vested interest in the regime's survival will leave them no choice but to fight on.
Troops from these units are squaring off in Sana'a against heavily armed tribesmen loyal to Sheikh Sadeq Al Ahmar, the head of the country's most powerful tribal confederation. Sheikh Al Ahmar sided with the street protesters against Mr Saleh, his longtime ally.
The two sides have fought on the capital's streets this month using artillery, rockets and mortars. The violence has caused extensive damage and forced thousands of residents to flee the city.
With Mr Saleh's relatives continuing to bolster their troops with more ammunition and soldiers, a fragile ceasefire is under increasing pressure.
Ahmed Saleh, 42, has moved to his father's office in the capital's main military compound, forcing vic-president Abdrabuh Mansur Hadi , the acting president, to work from his home or the defence ministry. When Mr Hadi attempted to assert his authority and meet opposition representatives, Ahmed Saleh and his close aides let him know through intermediaries that he should not get comfortable in his new position.
Ahmed Saleh has also shot down the prospect of renewed negotiations on proposals put forward by the Gulf Cooperation Council to end the political impasse.
While his challenge to Mr Hadi's authority could be a prelude for his father's return to resume the fight for his regime's survival, it's unclear if the Saudis will allow him to return. There is also confusion about the severity of the president's injuries. US officials have said he has burns on 40 per cent of his body and bleeding inside his skull. Dates for his expected return have come and gone.
The president's return, says r, says Abdul-Bari Taher, an analyst Yemen's Center for Studies and Research, a semi-official think tank based in Sana'a, could spark civil war: "President Saleh is truly a man of war. A man who spent most of his adult life fighting. He is the one who can start a war and as long as he is out of the country, the prospect of civil war will be weak."
But trouble could also come from a different direction. Sheikh Al Ahmar and his Hashid tribal confederation had been longtime allies of Mr Saleh. Sheikh Al Ahmar sided with the protesters in March along with Major General Ali Mohsen Al Ahmar, the commander of the powerful 1st Armoured Division who protected the protesters against the regime's security forces.
If Mr Saleh's regime falls, the two men will expect to be rewarded politically for the huge risk they have taken when they defected to the protesters' camp, a move that is likely to place them on a collision course with the protest leaders who view them with suspicion because of their long association with the president.
Yemen's powerful neighbour Saudi Arabia is known to be a generous backer of many of the country's tribal chieftains and the Al Ahmars have been on the receiving end of the lion's share of the Saudi largesse. It's expected Riyadh would back them if the Saleh regime is out.
Another source of instability is the presence in Yemen of Al Qaeda in the Arabian Peninsula. Washington labels it as the world's most active Al Qaeda branch and it includes a large community of religious extremists that the president has used to counter the influence of leftist and liberal groups, as well as his own political rivals and secular-minded intellectuals.
The line is blurred between Yemen's large and diverse community of militants and Al Qaeda, which is thought to have no more than 300 full-fledged members in Yemen.
The Al Qaeda extremists and other groups has given Yemen and the world a sample of how things will unfold if the current power vacuum was continues.
In late May, militants seized control of Zinjibar, capital of the southern province of Abyan, as well as Jaar, a small town in the province. Last week, dozens of suspected Al Qaeda militants tunnelled their way out of a prison in the southern city of Mukalla in a carefully planned escape aided by bands of gunmen who simultaneously attacked the prison as the inmates made their way out.
The capture of the two towns showed the growing influence of the militants in a place whose religious conservatism provides them with a suitable environment to blend into the population.
Some in Yemen, however, suggested that the groups that seized Zinjibar were among regime-backed militias and a clique of Al Qaeda militants who led them. Whoever they are, the government responded with airstrikes and dispatched a large military expedition to seize back the two towns.
Al Qaeda in the Arabian Peninsula has been linked to several attempted attacks on US targets, including the foiled 2009 Christmas Day bombing of an airliner over Detroit and explosives-laden parcels intercepted aboard cargo flights last year.
Yemen is also home to radical US-born Muslim cleric Anwar Al Awlaki, whom Washington has put on a kill-or-capture list and accused of inspiring attacks on the US, including the 2009 shooting at Fort Hood, Texas, in which 13 people were killed.
The turmoil of the past four months has left Mr Saleh too preoccupied to focus on the fight against Al Qaeda, leaving the United States little choice but to step up its operations there with airstrikes and drone attacks.
The recent US operations came after a nearly year-long pause in American airstrikes, which stopped amid concerns that poor intelligence had led to bungled missions and civilian deaths that were undermining the goals of the campaign.