At least 48 people, including 40 militants, were killed Thursday in clashes in Yemen's southern province of Abyan where Al-Qaeda and the army are battling for control, state media said.
The country's armed forces "chased down terrorist elements being routed in the direction of the town of Shuqra," the SABA official news agency said, noting that "300 terrorists are surrounded in their last strongholds."
"Forty terrorists were killed in the offensive and dozens have been wounded," it added, citing a military source.
SABA said the air force had launched around 100 raids against militants holed up in Shuqra.
On Tuesday, the military drove the jihadists out of the provincial capital of Zinjibar and Jaar, with Al-Qaeda gunmen believed to have fled east to Shuqra, the only town in Abyan besides Mahfad which the extremists still hold.
A military official speaking on condition of anonymity said earlier that six civilians, "three women, two children and one man, were killed in a Yemeni air raid" on Shuqra.
The official said the intended target had been militant fighters.
A local official said two soldiers were also killed on Thursday.
"Clashes using machine guns between Al-Qaeda militants and the army, backed by local militiamen, left two soldiers dead and 11 wounded," the official said on condition of anonymity.
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He said the civilians, who had fled the city last May after Al-Qaeda took control, died in two separate landmine explosions.
According to Zinjibar's deputy mayor, hundreds of displaced residents have returned since Tuesday to find their "homes flattened and the city destroyed."
"Today I arrived here with my family and was shocked by the total destruction of the city," Ghassan Sheikh said.
He said the army has so far been unable to clear all the landmines planted by Al-Qaeda, adding they have been sown in most of the city's streets.
In Jaar, meanwhile, residents said they were able to free some 20 prisoners from an Al-Qaeda detention centre, among them local clerics imprisoned by the jihadists for opposing their presence and speaking openly against terrorism.
Taking advantage of the weakening of central government control by an Arab Spring-inspired uprising last year, the militants had overrun most of Abyan, taking full control of Zinjibar, Jaar, Shuqra and several villages.
On May 12, Yemen's military launched an all-out offensive to recapture territory lost to the jihadists.
A total of 540 people have died in the campaign -- 402 Al-Qaeda militants, 78 soldiers, 26 militiamen and 34 civilians -- according to an AFP tally compiled from various sources.
Tuesday's military victories came just hours before the UN Security Council unanimously passed a resolution threatening sanctions against groups seen as undermining Yemen's political transition.
The main targets of Resolution 2051 are the family and supporters of Yemen's ousted president Ali Abdullah Saleh, although they were not named in the text, diplomats in New York said.
Saleh has been accused by his opponents of allowing Al-Qaeda to take hold of large swathes of the country's south and east, and of meddling in the new government's affairs.
The resolution also backed President Abdrabuh Mansur Hadi, who pledged to destroy Al-Qaeda when he was sworn in as Saleh's successor in February.