Yemeni troops took control of the southern city of Shuqra on Friday after Al-Qaeda militants pulled out of the third jihadist bastion to fall in a week, a military official said.
"The army has taken control of Shuqra," said a military official, adding that "troops have taken positions in the centre" of the coastal city.
He said advancing troops killed 27 militants in firefights overnight, after state media reported at least 48 people, including 40 militants, killed on Thursday.
A local official told AFP Al-Qaeda fighters "pulled out towards Azzan" in Shabwa province, some 110 kilometres (70 miles) to the northeast, and a stronghold of Al-Qaeda in the Arabian Peninsula (AQAP).
The official said militants fled after the army "tightened the noose from three fronts."
In an indication that government appears set to hunt down the militants, witnesses said air forces struck the Saqah mountains between the towns of Rawdah and Hawta, which are also Al-Qaeda bastions near Azzan.
They said that militants have hideouts in the mountains.
Shuqra was the last major AQAP stronghold in Abyan province to fall to government forces, which launched an all-out offensive last month that has already resulted in the recapture of the towns of Jaar and Zinjibar.
The militants remain in control of the smaller town of Al-Mahfad.
The defence ministry news website 26Sep.net confirmed Shuqra's recapture, adding that units from several brigades, the elite Republican Guard and local anti-Qaeda militiamen took part.
General Mohammed Labuza, deputy chief of staff for armament, said the "terrorists received painful blows," adding that air forces were "dealing with criminal elements on the run."
The official Saba news agency said warplanes had launched around 100 raids against militants in Shuqra.
On Tuesday, the military drove the jihadists out of provincial capital Zinjibar and Jaar.
Signup to our newsletter and follow us on Facebook and Twitter!
On May 12, the army began its offensive to recapture territory lost to the jihadists.
A total of 567 people have died in the campaign -- 429 Al-Qaeda militants, 78 soldiers, 26 militiamen and 34 civilians -- according to an AFP tally compiled from various sources.
In Shuqra, hundreds of soldiers and local militiamen, known as the Popular Coordination Committees, set up checkpoints as residents took to the streets to welcome government forces.
"Now our problems are finished. The extremists were the reason for all the trouble," resident Ali al-Abyani said by telephone.
He said people welcomed the army with national chants, as some fired guns in celebration.
Saba said that deputy parliament speaker Mohammed al-Shadadi and several army commanders took part in the celebrations.
Tuesday's recapture of Jaar and Zinjibar 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 were the family and supporters of ousted president Ali Abdullah Saleh, although they were not named in the text, diplomats said.
Saleh has been accused by his opponents of allowing Al-Qaeda to take hold of large swathes of south and east Yemen 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.
In other unrest, Yemeni forces killed 15 Al-Qaeda fighters at a control station in Shabwa province on the country's only gas export pipeline, a military official and a witness said.
The incident took place on Thursday night, when the militants attacked Station Nine in the eastern province where the jihadist network remains active, the military official said.
And in Aden, eight people, including six soldiers, were wounded in a gunfight with southern separatists after troops removed a year-old protest camp in Mansur district.
Aden is a stronghold of southern militants demanding either autonomy or outright independence for the south, which was a separate state until 1990.