About 300 protesters wrenched metal tree protectors from their bases to block roads, halting traffic to the airport. Hundreds shouted: "No Bajammal after today," referring to Prime Minister Abdul-Kader Bajammal.

Riot police fired shots in the air to disperse the crowd, which later re-gathered and pelted police with stones. Police retaliated with water cannons.

Smoke could be seen billowing over the city and the sound of gunshots came from several neighbourhoods. Shops around the city shut down after the rioters swarmed the streets.

In one neighbourhood, rioters tore down a poster of Yemeni Airlines and attacked a private company's office, destroying its computers and belongings, witnesses said.

The army and the elite Republican Guards reinforced police presence and troops blocked most main streets. Security forces prevented protesters from charging toward the ruling party's office headquarters or reaching the presidential palace in the capital.

The hundreds of protesters who gathered in the centre of the capital, Sanaa, came from mostly low income neighbourhoods.

By late afternoon, demonstrators dispersed, mostly due to heavy rain, but also to meet in typical afternoon gatherings where Yemenis consume "qat," a stimulant popular in the country.

The government made the decision to reduce gasoline subsidies seven months ago to curb a budget deficit, but has postponed it more than three times to avoid sparking protests. Critics said curbing public expenditure all round, including military spending, would have been more effective.

The eight dead, including a security guard, were killed in protests in the capital and the southwestern provinces of Dhamar and Ad Dali, police said. Two more people were killed in Sanaa, including a 12-year-old, witnesses said. Police did not confirm the report.

The hike in fuel prices reverberated elsewhere, with tickets for some public transport increasing by about 30 per cent.

The government vowed to offset the price hikes by cutting tariffs and taxes on sales and gradually increasing salaries and wages. It also said it would include 200,000 new cases to the government's social care program.

Yemen endured two days of clashes between police and protesters in March when the government proposed a new tax bill that raised prices on a wide range of goods by 10 per cent.