A row between Yemen's acting leader and outgoing President Ali Abdullah Saleh has put the nations' transfer of power agreement at risk, senior opposition sources say.

Saleh's former vice president Abd Rabbo Mansour Hadi has accused Saleh and his confederates of "interference" since signing a Gulf-brokered transfer of power deal aimed at ending months of unrest and political deadlock in the impoverished Arabian state.

The plan brokered by the six-member Gulf Cooperation Council called for the formation of a unity government to be headed by Hadi that would steer Yemen towards Presidential elections in February. Under the agreement Saleh is to remain Yemen's 'honorary' president until the elections, but is not intended to have any power.

Relations between Saleh and his former deputy began to deteriorate after Hadi refused Saleh's demands to reinstate the outgoing president’s allies. Saleh supporters heavily criticized Hadi, leading the acting leader to boycott subsequent meetings with the outgoing president.

Saleh signed the deal in November, having backed out of it three times before, in exchange for immunity from prosecution. But many question his intentions, especially after he announced last week he would stay in Yemen.

The announcement came as the Obama administration appeared to be dragging its feet over Saleh's application to seek medical treatment in the United States. Officials in Washington want to avoid the appearance of giving asylum to a former dictator whose security forces killed hundreds of protesters over the past year.

At the same time, the United States and Saudi Arabia are keen for the plan to work, fearing that a power vacuum in Yemen is giving terrorists breathing room in the south of the country, where they have established a stronghold.

Yemen also faces a tribal insurgency in its often contentious north, raising fears about whether the country's traditionally weak central government will be able to stabilize the country if Saleh sparks a power struggle by attempting to remain in power.

Saleh's office denies charges he continues to meddle in the day-to-day running of Yemen's government under Hadi.