At least five people were killed in the protest hotbed city of Taiz on Friday, activists and medical workers said, and the head of a new government meant to prevent civil war in Yemen said a week-old political pact could unravel if the killing went on.

The bloodshed in Taiz made clear that a deal to ease President Ali Abdullah Saleh from power has yet to defuse 10 months of violent unrest over the fate of Saleh and the political future of impoverished country.

Yemen's Gulf Arab neighbours and their U.S. ally hope the deal can reverse a drift toward chaos on the doorstep of the world's top oil exporter, Saudi Arabia, and stop al Qaeda's Yemeni branch gaining a foothold near Red Sea shipping routes.

In Taiz in south Yemen, government forces shot dead three civilians, and a fresh battle between government troops and gunmen backing protesters killed two people trapped in their homes during fighting, protest leaders and medical workers said.

At least 12 civilians, government soldiers and anti-Saleh gunmen were killed in Taiz in recent days.

The 12 dead in the city 200 km (120 miles) south of the capital Sanaa included five civilians killed by pro-Saleh troops during intense shelling of some Taiz neighbourhoods, according to residents and medical workers.

Protesters in Taiz are ringed by troops loyal to Saleh as well as tribal forces and troops opposed to him. Taiz's governor called for a ceasefire late on Thursday.

Mohammed Basindwa, a former foreign minister designated by opposition parties to lead a government to be split between them and Saleh's party, said his side would rethink its commitment to that pact if the killing in Taiz did not cease.

In a statement, Basindwa said the killing in Taiz was an intentional act to wreck the agreement that opposition parties signed along with Saleh, who had thwarted the deal brokered by Yemen's Gulf neighbours on three prior occasions.

An official of the bloc of opposition parties that signed the deal said on Thursday they had agreed a cabinet line-up with Saleh's party and the bloc's spokesman said this could be announced as early as Saturday.

The official, speaking on condition of anonymity, said Saleh's party would take portfolios including defence, foreign affairs and oil, while the opposition would get the interior, finance and education ministries.

A completed transfer of power would make Saleh the fourth Arab autocrat to be toppled by mass public protests that have reshaped the political landscape of the Middle East this year.

RIGHTS GROUP CALLS FOR FREEZE OF ASSETS

The prospective government is supposed to shepherd Yemen towards a presidential election that Abd-Rabbu Mansour Hadi, the vice president to whom Saleh has transferred his powers, has set for February 21, 2012.

Opposition sources also said they had given Hadi a list of their choices for a military council tasked with running the army until a new president is elected.

The list included former defence and interior ministers plus army commanders who turned on Saleh.

Under the Gulf initiative signed by Saleh, a body will be set up to restructure the armed forces. Saleh's son Ahmed commands the Republican Guard, one of the best equipped units.

Protesters in Taiz and elsewhere have denounced the immunity from prosecution that Saleh and his relatives would enjoy under the power transfer deal.

Human Rights Watch said last week that up to 35 civilians had been killed in Taiz since a U.N. Security Council resolution in October that endorsed the call for a power transfer and condemned the crackdown on protesters.

The group said most of those civilians were killed by artillery fire from Yemeni government forces, and called on the U.N. Security Council to freeze the assets of top Yemeni officials and distance itself from any promises of immunity.

Any Saleh successor will face multiple overlapping conflicts that have gained force during the political crisis, including rising separatist sentiment in the south, which fought a civil war with Saleh's north in 1994, and fighting with Islamists who have seized territory in the southern province of Abyan.

An local official in Abyan said the head of a volunteer force fighting Islamists was wounded and another person killed when unidentified attackers hurled a bomb at him as he was en route to Friday morning prayers in the city of Lawdar.

(Additional reporting by Mohammed Mukhashaf; Writing by Joseph Logan; Editing by Rosalind Russell)