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U.S. Lacks Plan for Dealing With Chaos in Yemen Despite Dire Warnings

The Obama administration, after helping to orchestrate a U.N.-backed military intervention in Libya, is facing pressure to do more to prepare for the potential collapse of the government in another Mideast country, Yemen -- but U.S. officials admit they are doing little more than watching at this point.

Though Yemen President Ali Abdullah Saleh has already offered to step down by the end of the year, anti-government demonstrators still swell the streets of the capital Sana'a as the government declares a state of emergency.

Yemen's parliament is now giving Saleh, who has led the country since 1978, even broader powers to arrest opponents and censor media coverage as he faces growing opposition to step down immediately.

Yemen is a central ally of the U.S. government against Al Qaeda in the Arabian Peninsula. The group, along with its operational planner, the American Anwar al-Awlaki, the first American on the CIA's kill or capture list, are now considered a greater threat than Usama bin Laden's network in Pakistan. And one U.S. lawmaker suggests that chaos in Yemen could result in a worse terrorist breeding ground than Afghanistan.

But Defense Secretary Robert Gates’ admission in Cairo that the administration had not focused on a future without Yemen's president was startling.

“Clearly there's a lot of unhappiness inside Yemen. And I think we will basically just continue to watch the situation. We haven't done any post-Saleh planning,” Gates said.

President Saleh’s government has been fighting a civil war in the north with Houthi Shia rebels, and in the south it faces a secessionist movement. The mountainous terrain has also provided cover for the Al Qaeda affiliate that launched two attempted strikes against the U.S. in the last 15 months.

Asked to explain why there is apparently no formal back-up plan for what seems to be the inevitable departure of Yemen's president, State Department spokesman Mark Toner seemed caught off guard, saying the U.S. fight against Al Qaeda was more than Saleh.

“What I can say is that that assistance will continue and it’s about the government to government aspects of it and not necessarily tied to one individual,” Toner said.

When asked if the administration has a contingency plan, Sen. Mark Kirk, R-Ill., said they should have a plan-B.

“If the Yemeni government collapses, it could be a tremendous setback for counterterrorism strategy,” Kirk said. “If the Yemeni government falls as I expect it will, we might have to fall back to bases like we have in Djoubouti to run counter-terror operations.”

Sen. Lindsey Graham, R-S.C. laid out to Fox News the worst case scenario. He says a failed state with no clear leadership, could make Yemen the new Afghanistan – on steroids.

“If the country devolved into chaos and there was no working relationship with the Yemeni military, I fear that Iran would have big influence in the north and Al Qaeda would dominate parts of Yemen and have a safe haven that would have to be dealt with eventually,” Graham said.

Sources say the hunt for the American cleric will continue, but clearly the Yemeni president who has been front and center in helping the U.S. find him is now focused on his own survival and not U.S. problems.

Catherine Herridge is an award-winning Chief Intelligence correspondent for FOX News Channel (FNC) based in Washington, D.C. She covers intelligence, the Justice Department and the Department of Homeland Security. Herridge joined FNC in 1996 as a London-based correspondent.