Officials in Saudi Arabia and Yemen say President Ali Abdullah Saleh will not return to Sana'a.

Instead Saleh will remain in Riyadh, where he has been recuperating from wounds received in an assassination attempt targeting the president and his inner circle in June.

The officials spoke to AP on condition of anonymity Friday because they were not authorized to release the information.

Last week Saleh authorized his deputy, prime minister Ali Mohammad Mujawar, to pursue transfer of power talks.

On Thursday, the US State Department released a statement saying it believes Saleh could sign the Gulf-sponsored proposal to transfer power to his vice president within a week.

Saleh has drawn back several times from signing the power transfer accord proposed by Yemen's influential neighbors.

But Saleh's departure, while popular in the street and press, could be a blow to US-led efforts to fight terrorism in the region, which Saleh's regime has actively facilitated.

It is unclear if opposition leaders, many of whose sympathies do not lie in the West, will continue to allow US counter-terrorism forces to operate in the country.

Al Qaeda linked militants have taken advantage of months of turmoil surrounding huge protests demanding Saleh's resignation to seize several strongholds in the south of the country.