Al-Qaeda, still smarting from the loss of its iconic leader Osama bin Laden, appears determined to capture the south Yemeni town of Loder in a bid to build itself a secure base in the Arabian Peninsula.
Its location between three provinces gives Loder strategic importance, and it can also provide a safe haven from bombardment from the sea, experts say, adding that the militant group is seeking to extend its influence across the region.
Despite the loss of an estimated 152 men in four days of fighting in and around Loder in Abyan province, Al-Qaeda in the Arabian Peninsula (AQAP) is still engaging Yemeni soldiers and local tribesmen in fierce firefights.
"Al-Qaeda has practically lost its refuges in Afghanistan, Pakistan and Iraq, after it was crushed in Saudi Arabia," says Mustafa Ani, an expert on jihadi groups.
He says that following Bin Laden's killing in Pakistan by US special forces on May 1 2011, the network he founded has been weakened and is now "seeking to establish a safe haven in southern Yemen.
"Such a refuge would allow them to set up training camps and centres for recruitment and selection of leaders."
Elements of Al-Qaeda, who call themselves Partisans of Sharia (Islamic law), already control large swathes of southern Yemen, notably the Abyan provincial capital of Zinjibar, which they seized in May last year.
Loder lies some 150 kilometres (95 miles) northeast of Zinjibar.
The militant group's task has been made easier by the weakening of central power in Yemen because of the challenge to the regime of former president Ali Abdullah Saleh, tribal rivalries and the ambitions of southern autonomists.
"Al-Qaeda controls or is able move freely in a crescent of territory stretching from the border with Oman to Abyan and the fringes of Aden through the desert province of Hadramawt," says Yemeni political analyst Fares al-Saqaf.
"It seems that Al-Qaeda has changed tactics. Instead of attacking and then fleeing, it has chosen to have a strong presence on the ground," Saqaf says.
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"The network would appear to want to convince people that it represents a kind of administrative group and is no longer made up of hordes of terrorists."
In the areas it controls, Al-Qaeda dispenses summary Islamic justice under sharia in addition to trying to administer local affairs.
Saqaf does not rule out collusion between elements of Al-Qaeda and soldiers still loyal to Saleh who are accused by the ex-strongman's opponents of trying to derail the political transition led by his successor, Abdrabuh Mansur Hadi.
And he also says some separatist southerners hostile to the unity of Yemen would not hesitate to collaborate with Al-Qaeda if it furthered their aims.
Ani believes that Al-Qaeda's foothold in Yemen can only be a springboard for future operations by the group in the rest of the Arabian Peninsula, especially Saudi Arabia.
"Yemen can be only a tactical step towards achieving a strategic objective, as defined by Osama bin Laden," he says.
"Bin Laden always regarded Yemen, his homeland, as a bridge that provides access to the Arabian Peninsula to put pressure on the world economy by controlling oil wealth."
In recent years many Al-Qaeda members infiltrated into Saudi Arabia from Yemen, forcing the Saudi authorities to boost security measures along its borders.
The United States, which says AQAP is the most active branch of the global terror network, has long made Yemen a major focus of its "war on terror."
US media reports have suggested that documents found in Bin Laden's compound at Abbottabad during the operation to kill him give credence to Al-Qaeda's perceived strategy concerning the Gulf.
He looked upon Yemen as a launchpad for operations against Gulf countries, in the belief that if you can control these nations you can control the world.