Yemeni Vice President Abd al-Rabuh Mansur Hadi issued a decree Wednesday to set up a national unity government to transfer power from loyalists of embattled President Ali Abdullah Saleh and prepare for presidential elections.

The decree approves the formation of a new 35-member Cabinet headed by veteran politician Mohammed Basindwa. The ministerial posts are equally divided between President Ali Abdullah Saleh's party and the opposition. Mr. Basindwa is from the opposition.

Saleh loyalists will run the ministries of defense, foreign affairs and oil, while the opposition will head the ministries of interior, finance and information.

The creation of a national unity government was stipulated under the Gulf-sponsored agreement signed by Mr. Saleh last month to transfer power to his deputy as part of a transition to democracy.

Meanwhile, fighting between opposition forces and government troops raged on the streets of the capital, Sana'a, Wednesday. Witnesses said one person was killed and at least four others wounded in army shelling near government buildings in the city's center.

President Saleh was in power for 33 years. His time in office will officially end in February when Yemenis go to the polls to elect his successor. The Gulf plan agreed to by Mr. Saleh and Yemen's main political parties allows him to remain president in an honorary capacity until that election.