The demonstrators waved the flag of the formerly independent south and pictures of exiled separatist leader Ali Salem al-Baid as they commemorated the short-lived Democratic Republic of Yemen that was crushed in the 1994 civil war.
"We swear to God Sanaa will not govern us," the protesters chanted. "Twenty years of oppression and resistance."
Southern leaders proclaimed their abortive breakaway state on May 21, 1994, just four years after the south merged with the north, ending 23 years of independence in a union that rapidly turned sour.
The civil war ended with the occupation of the south by northern troops and the dismissal of thousands of southerners from their jobs, sowing grievances that have festered ever since.
The Sanaa authorities have proposed a federal constitution to address southern grievances but southern leaders have rejected the planned six-unit federation.
In a speech broadcast from Beirut on Aden Live television channel, owned by Baid, the exiled leader said southerners were "determined to create an independent state."
He called on the government to begin negotiations with southern leaders "overseen by the Arab League and the international community... to prevent further bloodshed."
NJF/NJF