Islamist gunmen killed at least 32 soldiers on Monday when they stormed a military position in southern Yemen where militants control broad swathes of territory, a military official said.
Yemen has a seen a surge in violence in the south since President Abd-Rabbu Mansour Hadi took office in February. The government has responded with air strikes and the United States has repeatedly used drones to kill militants.
The attack on Monday came hours after a suspected US drone strike killed two men in a neighbouring province, including one the government described as a senior member of al Qaeda.
The military official told Reuters that gunmen attacked Yemeni troops outside the city of Zinjibar, capital of Abyan province, killing at least 32 servicemen. He said they captured a number of soldiers and made off with weapons and ammunition.
At least 40 soldiers were wounded in the attack, the official and medical sources said. A spokesman for Ansar al-Sharia, an al Qaeda-linked group that took Zinjibar last year, said his side captured 28 soldiers and a tank in the raid.
In a similar attack in March, militants killed about 100 troops in Zinjibar after Hadi took office.
Yemen's government and an al Qaeda-linked group active in the south both said the missile strike hours earlier in neighbouring Shabwa province killed Fahd al-Qasaa, who had been convicted of involvement in the 2000 bombing of the USS Cole warship in Yemen's southern port of Aden.
Residents of Shabwa and the militant group, Ansar al-Sharia, said the missile was fired from a US drone. A drone strike last year killed a US citizen who US officials subsequently claimed had helped plan a failed attack on a US airliner.
The use of drones has angered the public in Yemen as it has in other countries such as Pakistan, where Washington also uses unmanned aircraft to kill militants.
Washington has backed a power transfer that saw President Ali Abdullah Saleh replaced by his deputy in February, after a year of mass protests against Saleh. The United States now wants Hadi to unify the fragmented army and turn it against militants.