SANAA (Reuters) - Yemeni security forces killed two protesters and wounded dozens on Wednesday as mass rallies demanding the ouster of President Ali Abdullah Saleh paralyzed two major cities on Wednesday, residents and medics said.
Snipers shot dead two demonstrators in Taiz as unrest running into a third day shut down Yemen's main industrial city. Dozens were wounded by gunfire, tear gas, and beatings by plainclothes agents wielding bats, medics in Taiz said.
Protesters retaliated by torching a police building, residents said.
Neighboring oil giant Saudi Arabia and the United States fear escalating violence could push impoverished Yemen, already riven by tribal and separatist conflict, into chaos that could be used by al Qaeda's Yemen-based wing to operate more freely.
Security forces in Taiz had been trying to break up a protest blockade of the education ministry in the region, some 200 km (130 miles) south of the capital Sanaa.
But protesters instead extended their blockade to seal off Taiz's public services and branch of the oil ministry. Residents said the city of 540,000 people was effectively paralyzed.
"Stores are closed and the streets are completely empty of pedestrians, only protesters are around in the areas they are confronting (security forces)," resident Wajdi Abdullah said.
Protesters also brought life in the city of Ibb to a virtual halt. "Almost all the stores are shut in Ibb except a few selling basic food items. No one is going to work -- this is unprecedented in this city," said resident Ali Noaman.
The Arabian Peninsula country has been buffeted by three months of daily protests and demonstrators frustrated by Saleh's reluctance to relinquish nearly 33 years in power have been seeking new ways of loosening his grip.
Many have called for extending a sporadic general strike to a daily event.
Yemen is facing a growing fuel crisis as tribesmen continue a weeks-long blockade of Maarib province, the main source of its oil and gas. A shipping source told Reuters the government was losing around $3 million a day as exports were blocked.
But that blow may prove just as crushing for residents themselves as it is for Saleh's government.
Yemen's fragile economy is struggling to stay afloat as the currency tumbles below 240 against the dollar, and prices of basic necessities skyrocket. All this will increase hardship for the 40 percent of Yemen's 23 million people who live on less than $2 a day and a third of whom suffer chronic hunger.
Residents in more remote areas are also suffering severe water shortages because trucks have stopped bringing water shipments due to fuel rationing.
(Writing by Erika Solomon; editing by Mark Heinrich)