Security forces fired warning shots and used water cannons and tear gas at approximately 3,000 protesters outside the US embassy on Thursday after they attempted to storm the compound, activists have reported.
A number of people were reported to have been injured.
Reporters at the scene say the situation remains tense and sounds of gunfire can still be heard. Eyewitnesses say plumes of black smoke can be seen rising nearby the embassy where protesters set tires on fire.
Some reports also say that a handful of people managed to enter the building from a side street. However the information has yet to be confirmed.
Protesters are demonstrating against the American-produced anti-Islam film, which also enraged Egypt and Libya over the past two days.
According to reports, at least two cars were set on fire earlier.
The Yemen Times reports that US Embassy employees in Sanaa are being moved to a safer location.