Until now, the week-long conflict has been fought mainly between armed forces loyal to the two sides. Previous Scuds launched at Sanaa had not caused fatalities. Another Scud landed on Taiz, according to northern officials, without causing much damage.
A Reuters correspondent in Sanaa confirmed the northern claims. He said that rescuers working amid hysterical scenes of grief pulled dismembered corpses of children and adults from piles of rubble hours after the missile had fallen from the night sky.
At least five homes were flattened or badly damaged. The house that received the direct hit was turned into rubble. There were no immediate figures on the numbers of wounded.
Witnesses said they heard a deafening sound, then saw a dust column rising to the sky. Terrified mothers and children ran screaming in search of shelter after the Scud landed, according to the Reuters despatch.
The Scud landed less than 200m from the former home of the President of Yemen and northern leader, Ali Abdullah Saleh. However, Scuds are notoriously inaccurate and it is unlikely this was the target.
President Saleh delivered an ultimatum to southern leaders to leave the country or be killed. 'I am ready to give instructions to the Defence Ministry to stop attacks against the rebels (southerners) so they can leave Aden port to Djibouti or anywhere else . . . If they do not do this now they will pay a high price and will lose their lives,' Sanaa television quoted President Saleh as saying during a meeting with police officers in the city.
The south has appealed for humanitarian intervention in the conflict. And Vice-President Ali Salem al-Beidh, the southern leader who retreated to his stronghold of Aden last autumn, has called on the north to implement the reconciliation package agreed in Amman in February, including devolving some powers to Aden.
Vice-President Beidh has said he is willing to enter negotiations, but President Saleh has rejected any mediation. In the south, Aden radio said there had been fighting in three places near the old border between north and south Yemen: Dhala, Kurush, and over the Bab al- Mandab straits at the southern entrance to the Red Sea.
In London, a leading southern politician expressed concern at the superiority of the northern forces in arms and numbers. Salem Saleh al- Hadrami, one of the five-man presidency council of united Yemen and assistant secretary-general of the Yemen Socialist Party, told the Independent: 'They now have 100,000 troops, we lost five brigades that were stationed in the north.' (250 tanks, one brigade of artillery, one airborne brigade and one infantry brigade).
He pooh-poohed reports that there had been no more than 100 casualties to date. 'There have been about 10,000. Over 300 were lost in one battle.'
In any such conflict, one side always accuses the other of using foreign forces. In his case, he cited what he called irrefutable evidence that Iraqi pilots had been flying northern planes, and that ships from Sudan sent by the National Islamic Front had landed supplies for the Islamic Islah party in the north. Lloyd's Register of Shipping had no record of either vessel.
He blamed what he called the 'fundamentalist fascist Islamic' north for creating the current conflict. He called President Saleh a 'military dictator', whose ideology was based on that of the Iraqi Baath party. Indeed Yemen's support for Iraq during the Gulf crisis came only months after the unification of the country, and against the wishes of the south. Recently, Salem Saleh has visited Kuwait and the United Arab Emirates, countries where north Yemeni politicians are far from welcome, and Saudi Arabia, Egypt, Syria and Jordan.
'Yemen is poor. So what's the result of this war? It makes things worse. Everyone can see that.'
As we were leaving Mr Hadrami said: 'We rely on the help of the free press to convince the world that we need help, before we turn into refugees.'