Two Yemenis were killed during a third straight day of shelling in the protest hotbed of Taiz, residents said, raising the death toll from clashes between troops loyal to outgoing President Ali Abdullah Saleh and opposition fighters to at least 17.
Saleh handed over power last month to Vice President Abd-Rabbu Mansour Hadi, seeking to end 10 months of opposition to his rule that paralyzed Yemen.
But the violence shows no sign of abating.
Tens of thousands of residents defied the shelling to march in Taiz city centre demanding that Saleh be put on trial.
Residents said government forces used artillery, tanks and rockets on Saturday in residential areas of Taiz, trapping about 3000 families in the commercial hub some 200 km (120 miles) south of the capital Sanaa.
Opposition fighters responded with medium and light fire, they said.
Medics said two people were killed, one of them an activist shot by a sniper during the demonstration. The second was a bakery worker killed in front of his shop. A woman was also wounded.
An official from Saleh's party said the latest violence followed differences with opposition parties over the composition of a military committee agreed last month as part of the transitional deal following Saleh's departure.
Ten people died in fighting on Thursday, including five government soldiers, and five more were killed on Friday, medics and security sources have reported.
A rights centre run by the opposition put the death toll at 21 people.
State news agency Saba quoted security sources as saying that armed groups were behind Friday's attacks on government facilities, including the criminal investigations building, the regional branch of the Immigration and Passports Department and a military camp.
Prime Minister-designate Mohammed Basindwa, an opposition leader, has warned that his side would rethink its commitments under the transition accord if the fighting in Taiz did not cease.
In a statement, Basindwa said the bombardment was "an intentional act to wreck the agreement" that opposition parties signed along with Saleh, who had backed out of signing the deal brokered by Yemen's Gulf neighbors three times.
Saba said British Foreign Secretary William Hague told Hadi in a telephone call on Friday that the UK was monitoring the situation in Yemen, hoping that "the government of national reconciliation, after it is formed, would ensure security and stability in the capital and in the capitals of the provinces."
Under the agreement the military committee, headed by Hadi, would run the armed forces and oversee the end of fighting and return of forces to barracks.
It would be made up of an equal number of people from Saleh's General People's Congress (GPC) and the opposition Joint Meeting Parties (JMP).
An official with the GPC said Saleh's party was not happy about opposition nominees to the committee.
Saba said Hadi called on the provincial governor in Taiz and opposition parties to agree a truce.
Yassin Noaman, head of the JMP, said the violence was the result of delays in forming the military committee.
"The vice president must act as a consensus president and be responsible for implementing the operational mechanism without delay," he told Reuters.
A spokesman for the JMP called for the transition process to be speeded up.
"What is required is to speed up the establishment of a military committee that will oversee an end to fighting and ensure security ahead of restructuring of the army," said Mohammed Qahtan.
In separate violence, gunmen killed a colonel in the intelligence service at a coffee shop in the city of Ghayl Ba Wazir in Hadramout province, in southern Yemen, on Friday evening, local officials said. A resident was also killed and three were wounded in the attack, blamed on al-Qaeda.
It was the latest in a series of attacks in recent months on senior officers in the army and security forces in southern Yemen.