SANAA, Yemen—Yemen’s capital city sank toward anarchy on Tuesday as rival armies fought pitched battles in a neighborhood of middle-class homes and government offices in the worst violence to sweep this city since anti-government protests began nearly four months ago.

Forces loyal to Yemeni President Ali Abdullah Saleh shelled the compound of the country’s leading tribal sheikh, while forces loyal to Sheikh Sadeq al Ahmar stormed nearby government buildings.

By Tuesday evening, the Interior Ministry was in flames and the Ministry of Industry and the offices of Yemenia Airlines and the Saba news agency were severely damaged. Transiting the city was nearly impossible, and many people were trapped away from their homes as night fell.

At least 38 people were killed on Tuesday, including one tribal sheikh taking part in mediation efforts at Ahmar’s house.

“It is total war,” said one resident of the district where Ahmar’s house is located, describing both sides as leveling heavy artillery and rocket-propelled grenades at one another. “It is even worse than yesterday.”

Protesters who’ve occupied a sprawling camp near the entrance to Sanaa University since February were not involved in the combat, but the sit-in’s generally festive atmosphere gave way to anxiety.

“We are worried, of course, we are worried,” said Mohamed Nasser, one of the protest movement’s leaders. “If they attack the sit-in, who will protect us?”

What touched off the fighting remained unclear. On Sunday, Saleh refused to sign an agreement, brokered by the Gulf Cooperation Council, that would have led to his exit from power after 32 years in the presidency. But that refusal wasn’t seen as the direct cause of the fighting, which erupted outside Ahmar’s house on Monday.

Neither side offered an explanation for what had sparked the battle, but both sides said the other was responsible for the provocation.

The fighting underscored the complexity of Yemen’s political landscape, which features not only the months-long sit-in against Saleh, but long-running secession battles in the north and south, an Islamist insurrection that features an al-Qaeda affiliate, as well as a myriad of tribal rivalries and alliances.

Sheikh Ahmar declared support for anti-Saleh demonstrators in March  despite the fact that his father, Abdullah, had been a close Saleh ally. When his father died, Ahmar became the leader of the powerful Hashid tribal federation, and his family’s relationship with Saleh has grown increasingly tense.