President Ali Abdullah Saleh of Yemen has agreed to step down under a 30-day transition plan aimed at ending violent unrest over his 32-year rule.
Officials in the capital Sanaa confirmed the government had accepted the plan drawn up by Gulf Arab states.
Mr Saleh will hand power to his vice-president one month after an agreement is signed with the opposition, in return for immunity from prosecution.
At least 120 people have died during two months of protests.
Opposition leader Yassin Noman was quoted by Reuters news agency as saying he welcomed news of the handover but would not take part in a proposed national unity government.
The opposition have been insisting they will not accept immunity from prosecution for Mr Saleh and his family.
If Mr Saleh steps down as expected, he will join Tunisia's Zine al-Abidine Ben Ali and Egypt's Hosni Mubarak as the latest Arab leader to lose power because of a popular revolt this year.
The opposition say they welcome the initiative but seem reluctant to serve in a government with the ruling party. Opposition members have also been sceptical about any deal which would see President Saleh transfer power but not leave office immediately.
The timing of the announcement by the president is surprising. Earlier in the day, he delivered a tough speech to members of the country's army in which he accused the opposition of dragging Yemen into a civil war.
But on Friday Yemen saw some of the largest demonstrations so far as hundreds of thousands took to the streets in rival protests in support of both the opposition and the president. And on Saturday, opposition activists called for a general strike in the country.
Tariq Shami, a spokesman for Yemen's ruling party, told Reuters the party had informed the Gulf Cooperation Council "of their acceptance of the Gulf initiative in full".
Under the plan proposed by Saudi Arabia and five other states:
Within a month of signing an agreement with the opposition, Mr Saleh quits and hands over to his vice-president
Mr Saleh appoints an opposition leader to run an interim government tasked with preparing for presidential elections two months later
Mr Saleh, his family and his aides are given immunity from prosecution
Washington has urged Mr Saleh to set about the transition immediately.
"The timing and form of this transition should be identified through dialogue," state department spokesman Mark Toner said.
Hundreds of thousands of people attended a rally in support of Mr Saleh in Sanaa on Friday but comparable numbers turned out for demonstrations against him in both the capital and the southern city of Taiz.
On Saturday, a general strike called by the opposition caused disruption in Taiz, the port city of Aden and other towns, although apparently it had little effect in the capital.
Mr Saleh had hoped to serve out his current presidential term Yemen is the Arab world's most impoverished nation and, even before the current protests, it was becoming increasingly chaotic, with both al-Qaeda and separatist challenges to the government's authority.
Mr Saleh suffered a major political reversal last month when a slew of ministers and ambassadors resigned in protest at the shooting of 45 people at a demonstration in Sanaa.
Chinese police have raided a Tibetan Buddhist monastery in western China, killing two people, rights campaigners have said.
The International Campaign for Tibet (ICT) says an elderly man and woman were killed trying to prevent police arresting monks at the Kirti monastery.
Tension has been high since a monk set himself on fire last month in an apparent anti-government protest.
Foreigners have been prevented from travelling to the region.
'Beaten'
The US-based ICT said paramilitary police raided the monastery in Aba, in the Sichuan province, on Thursday night and detained more than 300 monks.
As the monks were being driven away, the police beat a group of people who had been standing vigil outside Kirti, resulting in the deaths of two Tibetans aged in their sixties, ICT said, citing exile groups in contact with people in the area.
"People had their arms and legs broken, one old woman had her leg broken in three places, and cloth was stuffed in their mouths to stifle their screams," an exiled Kirti monk was quoted as saying by the rights group.
Aba has been restive since Tibetan communities across western China rose up in protests three years ago.