Yemen's Shia Houthi rebels have surrounded the prime minister's residence in the centre of the capital Sanaa, officials have said.
"The gunmen have surrounded the palace and the prime minister is inside," a government spokesman was quoted as saying.
Fierce clashes erupted earlier in the day in which at least eight people were killed before a truce was agreed.
The clashes were the most intense since the rebels overran Sanaa in September.
Witnesses told the AFP news agency that the fighting between the rebels and the Presidential Guard erupted early on Monday after rebel reinforcements were deployed near the presidential palace.
The Presidential Guard then sent troops onto the surrounding streets, the eyewitnesses added.
A journalist in the city, Charlene Rodrigues, said there had been intense clashes in the morning followed by several hours of gunfire.
Under an earlier agreement with Yemen's President, Abdrabbuh Mansour Hadi, the Houthis had pledged to withdraw from the capital once a new unity government was formed.
However, the rebels are still deployed throughout the city and have taken control of several Sunni central and western parts of the country.
Tensions were further raised on Sunday when the Houthis abducted the president's chief of staff in a dispute over a proposed new constitution for the country.
A Houthi activist, Hussain Albukhaiti, said the group had been "provoked" into Monday's fighting after two of their positions were attacked.
He called the draft constitution, which would see Yemen split into six federally-administered regions, a "conspiracy" to divide the country.
The Houthis, who adhere to a branch of Shia Islam known as Zaidism, have staged periodic uprisings since 2004 in an effort to win greater autonomy for their northern heartland of Saada province.
They consolidated their control over Saada during the 2011 uprising that forced long-time President Ali Abdullah Saleh to step down.
Since July the rebels have inflicted defeats on tribal and militia groups backed by the leading Sunni Islamist party, Islah, and battled jihadist militants from al-Qaeda in the Arabian Peninsula (AQAP), which has vowed to defend the country's Sunni community.
Opponents allege that the rebels ultimately hope to reinstall the Zaidi imamate, which ruled North Yemen for almost 1,000 years until 1962.