The U.S. is now openly calling for Saleh to step down and allow for new elections to select a new government. It's doesn't work that way in Yemen. First of all, getting an honest election is very difficult. Then, no matter how clean the vote is, that is considered a starting point for the real negotiations between the tribes to determine who shall get what.
The fighting has caused oil shipments to be halted (one tribe blew up part of the pipeline and refuses to allow repair crews to fix it). Other interruptions to commerce have caused a spike in inflation, with prices expected to be about 30 percent for the year. Food shortages not only cause prices to increase, but for more and more people to go hungry.
Demonstrations continue to take place, especially each Friday, in the major cities. The military rarely attacks theses events. Saleh's security forces are still present, and sometimes disperse the crowds. But, mainly, the pro-Saleh forces simply maintain themselves throughout the country, fighting tribal or al Qaeda militias that attack.
In a somewhat separate war, two tribes have been fighting for control of the northern province of al Jawf. In the past week, this has caused over a hundred casualties (including at least 27 dead). In the past, Saleh would have brokered a peace deal. Without someone like Saleh, the tribes just fight it out until a new arrangement is agreed on.
The number of Yemenis trying to cross illegally into Saudi Arabia doubled in June. Saudi border guards caught about 20,000, of which about 500 were thought to be smugglers. All but the smugglers are usually just sent back. That's because most of the border crossers are either looking for work in Saudi Arabia, or trying to get to someplace else (like Europe). The smugglers are prosecuted. The Saudis also scrutinize all the line crossers for known or suspected Islamic terrorists. A few of those are found each year. Last year, nearly 200,000 people were caught trying to sneak in from Yemen. Many Yemenis are fleeing the tribal violence. For example, in the southern province of Abyan, where most of the al Qaeda men have been hiding out, fighting in the last month has caused over 50,000 civilians to flee their homes, and some keeping going.
The five months of unrest in Yemen has encouraged al Qaeda to come out of hiding and try to expand their area of control. So far this effort has mainly provided target practice for troops and scary headlines in the West. At the start of the year, al Qaeda only had access to some remote tribal areas. But now they are trying to establish themselves in parts of several southern cities. That effort has cost al Qaeda hundred of casualties and not much success. It has also provided the air force with a regular supply of targets (especially when al Qaeda tries to establish a road checkpoint). The pro-al Qaeda militias have managed to blockade an army brigade camp, and establish footholds in some southern cities. But all this has simply made the al Qaeda followers much more vulnerable to attack.
July 7, 2011: President Saleh appeared on television (from a Saudi Arabian hospital) for the first time since he was injured on June 3rd, by a rocket fired at his home. Saleh showed signs of the burns he suffered, but spoke strongly and called for unity. That is not what the many factions in Yemen want. They want Saleh gone and a new formula for distributing Yemen's dwindling resources. But Saleh seems determined to keep his coalition, and its privileges, in power.