Yemen's embattled President Ali Abdullah Saleh vowed Wednesday he would not step down or allow his impoverished nation to become a "failed state" even as urban combat between government troops and armed tribesmen engulfed parts of the capital.

Both sides raised the specter of civil war as the three-day death toll rose to at least 69. The latest violence comes just days after a failed Arab mediation effort to end the three-month uprising and ease Saleh from power.

After nightfall, residents reported heavy shelling that appeared to come from outside the city, targeting residential areas. The crackle of heavy gunfire could be heard in different parts of the city.

In the Arhab region about 20 miles northwest of Sanaa, a brigade of Saleh's presidential guard clashed with local tribesmen -- showing that the fighting was spreading outside the capital. Six government soldiers were killed and 21 injured in that fight, an army official said, speaking on condition of anonymity under military rules. It was unclear if any tribesmen were killed.

So far, 20 government troops, and 46 of al-Ahmar's fighters have been killed -- bringing the death toll since Monday to at least 69. Scores more were injured.

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Saleh's statement Wednesday -- read by spokesman Ahmed al-Soufi in a meeting with tribal allies -- ruled out a voluntary departure and blasted U.S.-backed efforts to negotiate his exit after 32 years of authoritarian rule.

"I will not leave power and I will not leave Yemen," the statement said. "I don't take orders from outside."

Saleh also threatened that his ouster could turn Yemen into a haven for Al Qaeda -- directly touching on U.S. fears that chaos in Yemen could open room for more terrorist footholds. The Yemeni branch of Al Qaeda is linked to the attempted Christmas Day 2009 bombing of an airline over Detroit and explosives found in parcels intercepted last year in Dubai and Britain.

"Yemen will not be a failed state. It will not turn to Al Qaeda refuge," the statement said. Saleh also said he would work to prevent the recent violence from "dragging the country into a civil war."

U.S. President Barack Obama has called on Saleh to transfer power -- a change from an administration that once considered the Yemeni ruler a necessary ally against terrorism.

On Wednesday, U.N. Secretary-General Ban Ki-moon called for an immediate end to the fighting, expressing concern that clashes "might further destabilize the situation," U.N. spokesman Martin Nesirky said at U.N. headquarters in New York.

The clashes broke out Monday after Saleh's troops tried to storm the compound of Sheik Sadeq al-Ahmar, the head of Yemen's largest tribe, the Hashid. Hundreds of tribal fighters rushed to the capital's northern Hassaba neighborhood, where clashes erupted with government forces.

Government troops Wednesday shelled the neighborhood around al-Ahmar's house while gunmen in civilian clothes exchanged gunfire and rocket-propelled grenades with tribal fighters.

The battles have ravaged the area, home to government offices and the headquarters of Saleh's ruling party. The tribal fighters have occupied 16 ministries and other government institutions, while Saleh's forces have used the interior ministry as their front-line base.

Some military units also appear to have broken ranks and joined the opposition. One breakaway unit trucked in stones to block streets in attempts to prevent government troops from moving in heavy weapons. Pro-Saleh forces, meanwhile, set up checkpoints in other areas, witnesses said.

Gregory Johnsen, an expert on Yemen at Princeton University, said the current fighting could spread quickly if any of Yemen's other armed groups jump in, especially if the first armored division of Maj. Gen. Ali Mohsen al-Ahmar, a former Saleh confidant who sided with the protesters in March. He is not related to the tribal chief.

"If the first armored division gets involved, then it is no longer just a two-sided fight," he said. "It gets much more complicated and the possibility of escalation across the country goes up significantly."

The fighting sent dozens of families fleeing the area and seeking refuge outside the capital. Eyewitnesses said that all roads entering Sanaa were blocked by pro-government Republican Guards, which are under the command of Saleh's son, leaving hundreds of Yemenis trying to enter the capital stranded and forced to spend the night in their cars.

The fighting also appeared to be widening into nearby neighborhoods. Volleys of mortars hit an army unit that had defected to the opposition side in the district of al-Nahda, killing three and injuring 10 others, according to a military official.

An airport official said that fighting north of the city forced a flight from the northern city of Hodeida not to land and return home.

The officials spoke on condition of anonymity because they weren't authorized to talk to the media.

Yemen's Interior Ministry blamed the tribal fighters for the violence. In a statement, al-Ahmar accused the regime of trying to "ignite discord and civil war between Yemenis."

The violence ended the most recent effort to negotiate and end to the crisis, which has struck Yemen's already staggering economy.

A delegation of tribal chiefs sent by Saleh to negotiate a cease-fire with al-Ahmar quit their mission Wednesday after saying government troops fired on them near al-Ahmar's house.

"It became clear to us that the president was not serious about the cease-fire and we the mediators decided to stop mediating and place the responsibility on the president," the group said in a statement.

The violence follows Saleh's refusal to sign a U.S.-backed agreement pushed by Yemen's powerful Gulf neighbors that would have seen him leave power in exchange from immunity from prosecution.

Other groups also criticized the attack on al-Ahmar's house that touched off the clashes.

A group of opposition parties that have sought to negotiate with Saleh called the attack "a planned crime of official violence to take revenge" al-Ahmar for supporting the anti-Saleh protesters.

Thousands of protesters marched through the capital Wednesday, not far from the clashes, calling on Saleh to step down. Protest leader Mana al-Matari said the marchers remained committed to nonviolence and accused Saleh of fueling the unrest.

"The president seeks to ignite the military situation and cause a war to serve his own interests and distract from issue of his stepping down," he said.