Yemen's US-backed president Abed Rabbo Mansour Hadi has quit under pressure from rebels holding him captive in his home.
The move severely complicated American efforts to combat al Qaida's powerful local franchise and raised fears that the Arab world's poorest country will fracture into mini-states.
Presidential officials said Mr Hadi submitted his resignation to parliament rather than make further concessions to Shiite rebels, known as Houthis, who control the capital and are widely believed to be backed by Iran.
The prime minister and his cabinet also stepped down, making a thinly veiled reference to the Houthis' push at gunpoint for a greater share of power. Houthis deployed their fighters around parliament, which is due to discuss the situation on Sunday.
Yemeni law dictates that the parliament speaker - Yahia al-Rai, a close ally of former autocratic ruler Ali Abdullah Saleh - will now assume the presidency. Mr Saleh still wields considerable power and is widely believed to be allied with the Houthis.
There were reports suggesting that authorities in Aden, the capital of the southern region of Yemen, would no longer submit to the central government's authority.
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