William Hague issued a renewed plea for UK citizens to flee Yemen as bloody clashes forced the withdrawal of all but a "core" staff at the British Embassy.
The Foreign Secretary said he was "appalled" by clashes that killed at least 28, days after the escalating situation was discussed by the Government's emergency committee Cobra.
Battles between regime forces and opposition militia in the capital Sana'a have claimed around 110 lives in four days amid warnings it could develop into civil war.
Mr Hague said if the violence spread it would become "very difficult" for the UK to organise the evacuation of any Britons caught up in it.
"I am appalled by the reports of yet more deaths in Sana'a. I absolutely condemn this latest violence," he said in a statement after the Cobra meeting.
"The agreement brokered by the Gulf Co-operation Council offers the chance for peaceful progress in Yemen and therefore we urgently reiterate the United Kingdom's call to President Saleh to sign the agreement, allowing for a peaceful transition and preventing further bloodshed.
"In light of the deteriorating situation, I have today decided to reduce the staffing of our Embassy to a level sufficient only to work on the most pressing and vital British national interests in Yemen, by temporarily removing four members of our staff.
"We have been warning British nationals to leave Yemen for months. It is now apparent that, should violence in Yemen become more widespread, it would be extremely difficult for the British Government to assist its nationals in Yemen in reaching safety.
"I therefore reiterate our clear advice that British nationals should not remain there and instead should leave Yemen immediately while commercial flights are still operating.
"I cannot stress this too strongly."
The Foreign Office declined to say how many embassy staff would remain for security reasons.