A top military commander and at least 18 other senior officers defected to the opposition movement demanding the ousting of Yemen's embattled president, depriving the US-allied ruler of most of his power base.
The looming collapse of President Ali Abdullah Saleh's regime throws into doubt the American campaign against a major al-Qa'ida wing that plotted attacks in the United States.
The defections led to rival tanks being deployed in the streets of Yemen's capital, Sanaa, creating a potentially explosive situation. It prompted Mr Saleh's defence minister, Mohammed Nasser Ahmed, to announce the military remained loyal to the long time leader.
The armed forces will counter any plots against the government, Mr Ahmed declared on state television, following a meeting of the National Defence Council, which is led by Mr Saleh.
The defection of Major General Ali Mohsen al-Ahmar, a long-time Saleh confidante and commander of the army's powerful 1st Armoured Division, was seen by many as a turning point.
It followed a major escalation in the regime's crackdown on protestors, when more than 40 were killed in clashes on Friday.
In Paris, French Foreign Minister Alain Juppe called Mr Saleh's resignation "un-avoidable". He pledged "support to all those that fight for democracy".