Yemen's army and southern separatists exchanged prisoners and agreed a truce Thursday in the violence-ridden southern city of Daleh.
Local dignitaries handed over to a presidential envoy 30 soldiers captured by the Southern Movement, a military official told AFP.
He said that in return, the authorities freed 37 separatists.
"Both parties agreed to implement a truce and normalisation measures" in Daleh, which has been paralysed by three months of intermittent clashes.
Southern Movement members said the measures would include the dismantling of barricades put up by separatists and checkpoints installed by the military.
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On March 6, Yemeni authorities postponed a visit by a UN humanitarian mission to the restive southern city, citing security concerns.
Daleh province is a stronghold of separatists demanding the secession of the formerly independent South Yemen, who have rejected plans announced last month for the current state to be replaced by a six-region federation.
A UN official has warned that more than 45,000 civilians in 20 towns in Daleh are "in desperate need of humanitarian assistance."
The town of Daleh, north of the port city of Aden, is a separatist bastion where civilians have suffered in fighting between militants and the army.
On February 18, three civilians were killed in a firefight that also claimed the lives of seven soldiers and three separatists.
And on December 27, tank fire killed 19 mourners in a funeral tent in the town.