Yemen named an opposition leader as interim prime minister on Sunday under a deal aimed at ending months of protests which have brought the country to the verge of civil war.
However, unrest continued to plague Yemen with violence between Shi'ite rebels and Sunni Islamists killing at least 25 people in the north - including six foreign citizens, according to the Sunni side.
Vice President Abd-Rabbu Mansour Hadi named as premier Mohammed Basindwa, a foreign minister from 1993 to 1994 who later joined the opposition, the state news agency Saba said.
Basindwa is to form a new government under the deal signed in Riyadh last Wednesday when President Ali Abdullah Saleh transferred his powers to his deputy.
On Saturday Hadi also called early presidential elections for February 21 under the agreement with the opposition to resolve the crisis resulting from 10 months of pro-democracy demonstrations demanding an end to Saleh's 33-year rule.
If the agreement, sponsored by the Gulf states, goes according to plan, Saleh will become the fourth Arab ruler brought down by mass demonstrations that have reshaped the political landscape of the Middle East.
Opposition parties agreed on Friday to nominate Basindwa, the head of an alliance that led the protests against Saleh, to form the new government. Under the Gulf-sponsored agreement, Saleh will receive immunity from prosecution and keep his title until a successor is elected.
Hundreds of people have been killed during the anti-Saleh protests. The political deadlock has reignited conflicts with separatists and militants, raising fears that al Qaeda's Yemen-based regional wing could take a foothold on the borders of Saudi Arabia, the world's top oil exporter.
In continued unrest, at least 25 people were killed and dozens wounded in northern Yemen in what Sunni Islamist Salafi fighters said was shelling by Shi'ite Muslim Houthi rebels on Saturday and Sunday.
The shelling killed 10 people on Saturday and continued on Sunday afternoon, a Salafi spokesman said, raising the death toll and injuring a further 48 wounded in Damaj, about 150 km (90 miles) north of the capital Sanaa. The defence ministry put the death toll at 32.
The representative of the Salafis, who identified himself as Abu Ismail, said six foreign nationals -- from the United States, Indonesia, Malaysia and Russia -- were among the dead after shells hit a religious school in Saada province, which lies in Yemen's northwest and borders Saudi Arabia.
The Houthis, who effectively control Saada, are deeply wary of Saudi Arabia's promotion of puritanical Sunni Salafi creeds that class Shi'ites as heretics.
Dayfallah al-Shami, a member of the Houthis' political office, told Reuters that Houthi leader Abdelmalek al-Houthi had issued orders for a cease-fire but the Salafis had rejected it and fought on.
The conflict in the north, where government troops also tried to crush the Houthi rebels before a cease-fire last year, is one of several plaguing Yemen.
Saleh, who returned home from Riyadh on Saturday, issued a pardon for those who committed acts of idiocy during the political crisis.
However, this excluded people involved in crimes or an attack on his compound, an apparent assassination attempt that forced him to seek medical treatment in Saudi Arabia in June.
Medical sources and activists in Taiz, a hotbed of protests against Saleh, said one person was killed when troops fired artillery rounds at tribesmen in the city.
(Additional reporting by Sami Aboudi in Dubai; Writing by Joseph Logan; editing by David Stamp)