Yemeni troops killed five suspected Al-Qaeda militants early on Sunday in an artillery attack in the southern city of Zinjibar, a local official said.
"The army launched an attack on several (Al-Qaeda) positions... leaving five dead and several others wounded," the official told AFP on condition of anonymity.
He said the attack followed clashes late on Saturday between militants from the Al-Qaeda-linked Partisans of Sharia (Islamic law) and government forces in the city.
In the nearby town of Loder, meanwhile, security forces arrested four Al-Qaeda-linked militants, a military official told AFP.
Tribesman also captured a fifth Al-Qaeda suspect who was in possession of an explosive belt, a tribal source said.
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The overnight violence came just hours after a suicide bomber blew up a vehicle outside a presidential palace in southeastern Yemen, killing 26 elite troops.
A military official said the bombing in the Hadramawt provincial capital of Mukalla bore the hallmark of Al-Qaeda.
Last May, militants from the Partisans of Sharia took control of Zinjibar, triggering months of fighting with government troops.
So far, at least three tribal-mediated negotiation attempts to secure the militants' withdrawal have failed.
Hundreds of people have been killed in the fighting and more than 90,000 residents have been displaced.
In the year since mass protests erupted throughout Yemen demanding president Ali Abdullah Saleh's ouster, the militants have taken over several towns and cities in the south and east.