A Yemeni draft law granting immunity to the outgoing president, Ali Abdullah Saleh, from prosecution over the killing of protesters was amended on Thursday to limit the protection his aides would enjoy, a minister said.

The draft law, which has been heavily criticised by rights groups, the United Nations and Yemeni protesters, will now shield the aides only in political cases, Legal Affairs Minister Mohammad Makhlafi told Reuters.

It had previously offered blanket immunity to associates of Saleh, who will still get full protection himself, Makhlafi said, without elaborating on what kinds of cases could be tried.

Under a power transfer plan hammered out by Yemen's wealthier Gulf neighbours and signed by Saleh in November, the veteran leader was promised legal immunity to help ease him out of office and end months of protests against his 33-year rule.

Rights groups say hundreds of protesters were killed by security forces in the uprising, which was punctuated by bursts of street fighting between Saleh loyalists and their foes.

Yemenis angry at the draft law are still taking to the streets calling for Saleh to be put on trial and U.N. human rights chief Navi Pillay earlier this month warned the immunity offer could violate international law.

Discussion of the law in parliament has repeatedly been put off, but Makhlafi said it would now take place on Saturday.

The United States has defended the draft law as the only way to coax Saleh from power, but question remain over his intentions after he reversed a pledge to leave Yemen before presidential elections in February.

Washington and neighbouring oil giant Saudi Arabia are keen for the plan to work, fearing protracted political upheaval will let al Qaeda's regional Yemen-based wing establish a foothold along oil shipping routes through the Red Sea.

Islamist militants this week seized the town of Radda, about 170 km (100 miles) southeast of the capital Sanaa, underscoring those concerns.

A tribesman negotiating with the militants on behalf of the government said their leader, Tareq al-Dahab, had refused to withdraw unless a council was set up to run the town according to Islamic law and 15 prisoners suspected of links to al Qaeda were released, including his brother Nabil.

Dahab is related to Anwar al-Awlaki, a U.S. citizen whom Washington accused of a leadership role in the Yemeni branch of al Qaeda, and assassinated in a drone strike last year.

The tribesman, Sheikh Saleh al-Jawfi, said Islamism fighters from Abyan and Shabwa provinces had made their way to Radda to join militant ranks, adding that armed tribesmen were taking up positions in another part of the town.

A short video posted on YouTube on Thursday, showed a man identified as Dahab by the SITE online monitoring service seated with a rifle to his left telling Muslims to await the establishment of the Islamic caliphate.

The Islamic caliphate is coming, with permission from Allah, and it will be established, even if we sacrifice our own skulls, money, children and homes, he said.

Saleh's opponents have accused him of deliberately ceding territory to Islamists to prove his argument that only he stands in the way of an al Qaeda takeover in Yemen, from where the global militant network has previously launched abortive attacks.

(Reporting by Mohammed Ghobari; Writing by Isabel Coles; Editing by Peter Graff)