At least 40 people were killed in heavy fighting on Saturday between the army and suspected Al-Qaeda militants in Yemen's southern province of Lahij, officials said.
"Twenty-eight soldiers were killed" in the fighting which erupted when the Islamist fighters attacked army positions in Mallah, a town in Lahij, an army officer on the ground told AFP.
An official in the Al-Qaeda stronghold of Jaar, southeast of Lahij, said 12 militants were also killed.
The officer had earlier told AFP that 17 soldiers were killed and 11 others were missing and "believed dead."
Reinforcements were brought into the area from Al-Anad air base in Lahij as clashes continued throughout the day, the officer said.
"The air force and ground troops are now shelling an army post which Al-Qaeda militants have managed to take over" in Mallah, he said.
Another military official said "two army tanks and three Al-Qaeda vehicles were destroyed in the fighting, (while) Al-Qaeda militants have seized several soldiers."
The official in Jaar said that "five soldiers were seized" by the extremists.
The attackers targeted the 119th and 201st army brigades, involved in military operations aimed at regaining control of Zinjibar, the capital of Abyan province southeast of Lahij, which the militants overran last May.
In a text message received by AFP, the Al-Qaeda-linked militants, who have named themselves Partisans of Sharia (Islamic law), claimed the attack which they declared as a "Battle of Dignity."
They said "30 soldiers" were killed in the fighting but did not say how many of their own men had died.
Signup to our newsletter and follow us on Facebook and Twitter!
On Friday, Al-Qaeda members sabotaged a 320-kilometre (200-mile) gas pipeline linking Marib province to Balhaf terminal on the Gulf of Aden, all in the country's restive south.
The pipeline attack came shortly after two US drone attacks in eastern Yemen targeted Al-Qaeda suspects killing seven people, six of them militants, according to a local official in Shabwa province.
The army has been locked for months in deadly battles with the Partisans of Sharia who have exploited a central government weakened by a year of anti-regime protests to strengthen their grip.
They have launched deadly attacks against security forces, especially across south and southeast.
At the start of March, 185 soldiers were killed in a massive assault by Al-Qaeda militants on an army camp near Zinjibar.
The United States says the Yemen-based Al-Qaeda in the Arabian Peninsula, or AQAP, is the most active branch of the global terror network.
In the capital Sanaa, soldiers from the elite Republican Guard units commanded by Ahmed, the son of former president Ali Abdullah Saleh, demonstrated outside the residence of President Abdrabuh Mansur Hadi, urging him to restructure the army.
Restructuring the army is one of several conditions set by a Gulf-brokered power transfer deal that saw Saleh cede power he had held for 33 years in return for immunity from prosecution.
During his years in power, Saleh, a self-declared US ally in its "war on terror," chose his aides carefully.
In addition to his son Ahmed heading the Republican Guard, his nephew Yehya commands central security services and another nephew, Tariq, controls the presidential guard.
And Saleh's half-brother, General Mohammed Saleh al-Ahmar, still commands air force units, despite nationwide protests calling for his ouster.