By Yara Bayoumy and Mohammed Ghobari SANAA (Reuters) - Yemeni President Abd-Rabbu Mansour Hadi resigned on Thursday, just days after Houthi rebels battled their way into his presidential palace, plunging the unstable Arab country deeper into chaos and depriving Washington of a key ally against al Qaeda. Hadi, a former general, blamed the Houthis' control of Sanaa for impeding his two-year-long attempt to steer Yemen toward stability after years of secessionist and tribal unrest, deepening poverty and U.S. drone strikes on Islamist militants. The announcement startled the Arabian Peninsula country of 25 million, where the Iran-backed Houthis emerged as the dominant faction by seizing the capital in September and dictating terms to a humiliated Hadi. "This is a coup," said Ahmed al-Fatesh, a hotel security supervisor, suggesting Hadi had been bullied from office. "The Houthis took power by force. Hadi is a legitimate president and was elected by more than 6 million Yemenis. Hadi tried to bring the political forces together." The Houthi movement said it had no official reaction as yet to Hadi's resignation, but urged Yemenis to stage mass rallies to show their support on Friday afternoon. A statement urged the army to "uphold" its responsibilities and called on Houthi fighters to be on alert. Hadi, who has led a United Nations-mandated bid to make political reforms and bury the autocracy and graft of the past, stood down shortly after Prime Minister Khaled Bahah had offered his government's resignation, saying it did not want to be dragged into "an unconstructive political maze". This was a reference to a standoff between Hadi and the Shi'ite Muslim Houthi movement which this week has been holding the president a virtual prisoner in his official residence. "We apologize to you personally and to the honorable chamber and to the Yemeni people after we reached a dead end," a government spokesman quoted Hadi's resignation letter as saying. It was addressed to the speaker of parliament, who becomes interim head of state under the Yemeni constitution. Sultan al-Atwani, one of Hadi's advisors, told Reuters he had resigned after pressure and threats from the Houthis. He also said parliament would meet on Saturday to decide whether to accept or reject it. The official Saba news agency said there would be an emergency meeting of parliament on Sunday. Late on Thursday, Houthi fighters took up positions around the parliament building, residents say. In the southern city of Aden, unidentified gunmen attacked two military armored vehicles in the early hours of Friday, two local officials told Reuters. Three explosions were heard in Aden during the attack, which was followed by the clashes, said one of the officials, who declined to be identified. The departure of Hadi, a southerner, has caused anger in Aden, a key port city where officials reacted by telling security officers to only obey orders issued in Aden, an implicit snub to institutions in the north, where Sanaa is. Earlier in the week, Aden closed its ports briefly in protest against Houthi militia attacks on state institutions in Sanaa, calling them an "aggressive coup on the president personally and on the political process as a whole". Hadi's decision marked an abrupt turnaround from Wednesday, when he said he was ready to accept Houthi demands for a bigger stake in constitutional and political arrangements. REGIONAL STRUGGLE That announcement had appeared to ease differences between him and the Houthis, whose rise to power places predominantly-Sunni Yemen within the wider sectarian struggle fought by proxies of Saudi Arabia and Iran in parts of the Middle East. The Houthis' defeat of the presidential guards had already added to disarray in a country where the United States is also carrying out drone strikes against one of the most powerful branches of al Qaeda. The rebels' rise has resulted in a shift in Yemen's complex tribal, religious and regional allegiances. Suspecting Iranian complicity, the Sunni Muslim authorities in Riyadh cut most of their financial aid to Yemen after the Houthis' takeover of the capital. In central Yemen, local tribesmen said they were pushing back Houthi fighters in Marib province, which produces half of Yemen's oil and more than half of its electricity. The local branch of al Qaeda has responded to the Houthis' ascent by attacking their forces as well as state, military and intelligence targets. As Zaydis, a Shi'ite Muslim sect, the Houthis oppose the hardline Sunni Islamists of al Qaeda. However, the Houthis' assaults on the militants risk raising sectarian feelings in Yemen. Before Hadi quit, clusters of Houthi fighters were dotted around the perimeter of the presidential palace on Thursday. At Hadi's residence, sentry points normally manned by presidential guards were empty, while a group of Houthis with an army vehicle were parked at a main entrance. (Additional reporting by Mostafa Hashem in Cairo, Mohammed Mokhashaf in Aden and Doina Chiacu in Washington; writing by Sami Aboudi and William Maclean; editing by Raissa Kasolowsky, G Crosse, David Stamp and Anna Willard)
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