Dozens of alleged al-Qaeda gunmen attacked security and government buildings in the southern town of Huta, killing two policeman and wounding five others, Yemeni medics and residents said.
Fierce clashes broke out at dawn on Wednesday between the armed men and police around the local branches of intelligence and central bank, and the courts in the Lahij province town of Huta, before dispersing toward nearby farms, residents said.
The attack raised fears that Huta might fall into the hands of the fighters after gunmen overran most of the town of Zinjibar in late May.
Yemen's security forces have also been heavily deployed in Aden amid fears that clashes between the army and alleged al-Qaeda fighters might spread to the strategic port city.
At least 81 soldiers and police have been killed and more than 200 others wounded in the Zinjibar clashes, according to a military official.
'Secret' CIA base
The US, which has poured millions of dollars into Yemen to train the army against al-Qaeda, announced on Tuesday that it is building a "secret" CIA air base somewhere in the Gulf region to target the group.
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The AP news agency reported that the move is seen as preparing for a "worst case scenario" if groups opposed to US foreign policy in the region win the current power struggle raging between Ali Abdullah Saleh, Yemen's president, and his opponents.
The White House has already increased the numbers of CIA officers in Yemen, in anticipation of that possibility.
The US has also stepped up the schedule to construct the base, from a two-year timetable to eight months.
However, Al Jazeera's Rosalind Jordan, reporting from Washington, said there are conflicting messages about the CIA's future involvement in Yemen.
"We have had one US official tell Al Jazeera that there is going to be the construction of a predator drone missile base somewhere inside Yemen. And we have had other officials essentially saying; that's not the case. So there is some confusion about whether the reports on this base are accurate, or that officials are simply trying to divert attention away from this story."
AP withheld the exact location of the base at the request of US officials.
The United States has been conducting air strikes against al-Qaeda targets in Yemen with permission from Saleh's government since 2009.
Government officials have recently allowed expanded strikes by US armed drones and war planes against
suspected al-Qaeda targets who analysts say are taking advantage of the current political unrest to grab power and territory in the Gulf country.
The six-nation Gulf Co-operation Council (GCC) has said it will continue its efforts to broker an end to the protests against Saleh's government.
Speaking on Tuesday, the foreign minister of the United Arab Emirates said "the unstable situation in Yemen is top of our agenda".
Sheikh Abdullah bin Zayed al-Nahayan also told a meeting of GCC foreign ministers in the Saudi city of Jeddah that the council had "made huge efforts to reconcile the opposing points of view and our efforts are certainly going to continue without let-up".
Hundreds of people have been killed in five months of protests against Saleh's rule.
Despite strong Western pressure, Saleh has repeatedly refused to formally sign up to previous GCC proposals under which he would hand power to the vice-president within 30 days in exchange for a promise of immunity from prosecution.
The country's opposition activists had called on the Gulf ministers to "stand with the will of the people in forming a transitional council that would achieve the aims of the revolution".
The "Youth Revolution" activists, who have been organising nationwide protests against Saleh's rule since January, have called on Vice-President Abdrabuh Mansur Hadi to form the proposed interim council immediately.
Saleh's "corrupt regime ... has used your initiative as a cover for its crimes against us", the activists said in a statement, referring to the GCC-brokered transition plan that Saleh has stalled for months.
Saleh is currently being treated in a Saudi hospital for wounds he sustained in a bomb explosion inside the presidential palace in the capital Sanaa.