Even if negotiators manage to prise President Ali Abdullah Saleh from power, Yemen's descent into anarchy and deprivation looks irreversible, posing vast risks for its people and their neighbours, not least oil giant Saudi Arabia.

Anti-Saleh demonstrations spiralled in Yemen after the overthrow of Egyptian President Hosni Mubarak in February, in a new twist to the myriad, chronic crises that had already ignited fears of state failure or civil war in the poorest Arab country.

For months, Yemen has muddled on through protests, privations and bursts of deadly violence. Citizens press on with daily life as soon as the crash of rocket fire tapers off.

Gulf and Western mediators have sought to induce Saleh to sign a deal with opposition parties under which, broadly, he would quit in return for immunity from prosecution -- anathema to street protesters demanding his removal and prosecution.

Saleh backed away from the deal three times before he was badly wounded in an assassination attempt in June and few Yemenis believe he will ever relinquish power willingly.

The struggle to end the president's 33-year rule is muddied by the ambitions of elite tribal and military leaders, but even a diplomatic solution will not reprieve Yemen from the breakaway revolts fraying its fabric or the resource crunch pushing a fast-growing population into a battle for survival.

Yemen has entered an almost permanent deterioration that will take years, if not decades, to reverse, said a Western diplomat in Sanaa, who asked not to be named.

It's hard to accept, but we're not going to get closure with a political deal. We are in for a long haul for decades.

LOSS OF CONTROL

The unstable political stalemate has encouraged insurgents, tribesmen and Islamic militants to chip swathes of the country away from government control, never very strong in Yemen.

Al Qaeda-linked militants have seized some coastal cities in the south, armed southern separatists sever major highways and Shi'ite rebels in the north have free rein on the Saudi border.

Saleh is just the strongman of the strongest faction in the country, which is all factions now, said one Yemeni official, who asked not to be named.

Yemen's tribal networks have often challenged government control, often seeking cash or development projects in return for accepting it, but recent land grabs may mark a darker trend.

These takeovers have a more political agenda with separatists groups gaining ground, said Yemeni analyst and journalist Sami al-Ghalib. Disintegration will spread as we see local groups establish their own cantons or emirates.

Houthi rebels from the Zaidi sect of Shi'ite Islam have taken over Saada province bordering Saudi Arabia and are fighting for control of nearby al-Jawf province.

Saudi Arabia, bastion of Sunni Islam and wary of anything that might embolden its own Shi'ite minority, intervened militarily to help the government battle the Houthis in 2009.

Right now the Houthis are not a direct threat, but in the future if they have their own territory, their fighters could transition and push the boundaries, Ghalib said.

MURKY STRUGGLE

In the south, tens of thousands have fled the coastal Abyan province where Yemeni troops are battling Islamist militants in a conflict that Saleh's critics say he has exploited to stir international fears that security will crumble without him.

A senior diplomat cited Western intelligence sources as saying that Yemen has the military might to beat the militants. That they have not done this points to political reasons.

People displaced from Abyan told Reuters security forces abandoned provincial capital Zinjibar without a fight when militants first entered in March. Neither Saleh loyalist troops or defected units backing the opposition put up any defence.

What's happening is a joke, said Ahmad Mohammed, 21, who fled Zinjibar when shelling burnt his home to the ground.

A five-month war by the Yemeni army, backed by America, against what, some 500 militants? Does that sound right?

Western and Gulf powers want Saleh to sign a transition deal in the hope that this would restore stability and allow the government to suppress al Qaeda's Yemen-based wing.

But turmoil has widened as pro- and anti-Saleh army units, each backed by tribal factions, face off in Sanaa and elsewhere, eclipsing the peaceful pro-democracy movement which threw up a co-winner of this year's Nobel peace prize, Tawakul Karmon.

Government forces hold the craggy mountain tops surrounding Sanaa, training their guns on the troops whose commander, General Ali Mohsen, defected to the opposition in March.

A Yemeni official said troops loyal to Saleh are three times stronger in numbers and equipment than their foes in the capital, an imbalance that many say has prompted Mohsen to start recruiting the unarmed protesters he had sworn to protect.

Mohsen and pro-opposition tribes are also trying to weaken the government troops by attacking them in other regions.

I don't think anything can happen soon, one negotiator said. Neither side can win and we have told them this, but we can't force them to do anything, we just have to keep talking and convince them the only way forward is a deal.

Some analysts, such as Ghanem Nuseibeh, the founder of the Cornerstone Global Associates consultancy, question the sincerity of Western and Gulf mediators, saying they had the ability to swing a solution, but lacked the political will.

They haven't been able to show Saleh the door and it is not because he is strong, he said. They haven't done so because they can't actually think of an alternative to Saleh.

The U.N. Security Council adopted a resolution on October 21 deploring the excessive use of force on protesters and urging Saleh to sign a deal, but so far it has had little impact.

HUMAN MISERY

Aggravated by political deadlock and the accompanying violence, Yemen's gravest long-term threat is a swelling humanitarian disaster as oil and water resources disappear.

Experts estimate that last year's 35 percent unemployment rate has more than doubled, while two thirds of Yemen's 24 million people may now be living below the poverty line.

That has prompted an increase in emergency humanitarian aid, but insecurity has halted crucial development work.

You can do as much as you want to save lives, but if no one is offering support to rebuild, the likelihood people will slide right back is much higher, said one aid worker, who declined to be named because he was not authorised to speak to the media.

Many Yemenis say they have no more money to send to their large families in poor rural areas who rely on them to survive.

UNICEF, the U.N. children's fund, warns that malnutrition rates in some areas are now on a par with famine-struck Somalia.

Many aid workers and diplomats marvel at how Yemenis retain any semblance of normal life under such conditions.

Why haven't things gotten as bad as we expected by now? one Western diplomat asked. Many Yemenis have low expectations because they already lived in poverty, and Islamic and tribal norms create a culture of sharing.

But Mohammed al-Maitami, an economist at Sanaa University, said family solidarity may soon reach its limits.

Those who were helping will need to survive themselves, he said, warning that a potential combination of economic disaster and more sustained conflict could cause mass migration that would alarm Yemen's wealthy and less populous Gulf neighbours.

If the fighting grows you will see hundreds of thousands migrating around the country -- and that will mark the end.

(Additional reporting by Mohammed Ghobari; Editing by Reed Stevenson and Alistair Lyon)