Battles raged Tuesday between Yemen's army and suspected Al-Qaeda militants for control of the southern city of Zinjibar, a military official said, as the toll of soldiers killed passed the 100 mark.
"We are engaged in fierce battles with terrorist elements from Al-Qaeda, leading to heavy losses on their part during the past three days," the official said, speaking on condition of anonymity.
At least 100 soldiers have been killed since the violence in Zinjibar erupted more than three weeks ago, while 260 others have been wounded, according to the official, updating an earlier toll.
Alleged Al-Qaeda militants, who have named themselves Ansar al-Sharia (Supporters of Islamic Sharia law) have been controlling most of Zinjibar, the capital of Abyan province, since late May.
The official told AFP by telephone that government air raids had destroyed "selected targets" around Zinjibar which he said were being used by the militants to launch attacks.
The official added that some troops had been pulled back in a "tactical move."
"We were forced to withdraw our 119th and 201st Artillery Brigades around three kilometres (1.8 miles) in a tactical move, as part of a strategy which we hope will work," the official said.
"We are facing heavy resistance from the network's militants as they are well-trained in gang fighting, and have foreign fighters within their ranks, including Arabs," said the official.
Senior local official, Ghassan Sheikh, complained meanwhile that the air strikes have also destroyed homes, killing and wounding many civilians.
Two civilians were also killed by shelling that hit a bus at the city's entrance on Monday, he said.
Mahfuz Abdullah, a member of the city's local council, said Zinjibar is being controlled by gunmen.
"Hundreds of masked armed men have taken over the city and nearby villages," he said. "We cannot leave our homes because of the fighting."
Abdullah said the fighters have also suffered many losses, with numerous cars seen carrying bodies to a nearby cemetery.
Officials say the militants are connected to Al-Qaeda, but opponents of the country's embattled President Ali Abdullah Saleh accuse his government of exaggerating a jihadist threat to heed off Western pressure on his 33-year rule.
Yemen is the home of Al-Qaeda in the Arabian Peninsula, an affiliate of the slain Osama bin Laden's militant network. The group is accused of anti-US plots including an attempt to blow up a US-bound aircraft on Christmas Day, 2009.