A clash occurred at dawn on the farm at Zinjibar, the capital of Abyan province which is a hotbed of Al-Qaeda activity, a security official told AFP, giving a toll of one militant dead and two wounded.
A medic at the local hospital confirmed the toll.
The security official also said that during the night armed men had attacked a riot police post, an army camp and a telecommunications building in Zinjibar with mortars but caused no casualties.
He blamed Al-Qaeda for the attacks, which came after clashes in the region on Wednesday between security forces and jihadists in which nine people, including four policemen and a soldier, were killed.
A day later, a suspected US drone attacked a senior Al-Qaeda leader in another southern province, Shabwa, but missed and killed two brothers, both local members of the militant network, a security source told AFP.
Media reports in the US said that the US drone attack had targeted but failed to kill US-Yemeni cleric and terror suspect Anwar al-Awlaqi, who is linked to Al-Qaeda and considered a major threat to the United States.
The Wall Street Journal and CBS reported the attack was targeting Awlaqi, the US-born radical cleric who is suspected of orchestrating terrorist attacks on the US.
Both reports cited US officials who declined to be identified.
There was no official word from the Yemeni authorities on who carried out the strike, or who the intended target was. But witnesses insisted it was a US drone that fired the missile.
The defence ministry confirmed the killing of the two brothers, but did not elaborate on the circumstances of their deaths. Security sources identified the two brothers as Abdullah and Mubarak al-Harad.
Yemen has come under intense pressure to crack down on the jihadists' local franchise, Al-Qaeda in the Arabian Peninsula, since a Christmas 2009 attempt to blow up a US airliner that was claimed by AQAP.
Washington has expressed fears that Al-Qaeda could take advantage of a prolonged political crisis in Yemen, where Saleh has faced mass protests since late January calling for him to step down.