Yemeni soldiers have been battling al-Qaeda-linked fighters outside the southern city of Zinjibar, which remains partly under the control of anti-government groups who seized it more than half a year ago.
Sixteen of the fighters and four soldiers were killed, a Yemeni military official said on Tuesday.
The overnight fighting included intensive artillery shelling from the government side and took place overnight, the official said.
The fighters have overrun swaths of territory in the area, taking advantage of the security vacuum that has developed as a result of the political unrest that continues to roil the fragile and impoverished country on the southern edge of the Arabian Peninsula.
A deal for longtime President Ali Abdullah Saleh to hand over power has failed to quiet the protests calling for his ouster that began last February.
Many of his opponents object to the deal because it grants him immunity from prosecution and they would like to see him tried on charges of corruption and playing a role in the bloody crackdown on protesters.
Protests have continued in the capital, Sanaa, and other anti-government hotbeds like the southern city of Taiz, Yemen's second largest city.
Two soldiers among the military units that have defected to join the opposition were killed on Tuesday in a busy Taiz street by a pair of gunmen who fled on a motorcycle, a security official said.
About 5,000 residents of Taiz began a four-day march to the capital on Tuesday to demand Saleh stand trial.
Some have suggested he be tried at the International Criminal Court in The Hague.
Salah al-Numan, one of the organisers of what has been dubbed the "Life March", said he expected hundreds of people to join as it passes through five towns.
One of the grievances that helped ignite protests in February is the corruption that has been common during the years of Saleh's rule.
On Tuesday, employees of the national carrier, Yemenia Airways, went on strike to demand the resignation of the airline's boss, Abdel-Khalq al-Qadhi, a son-in-law of President Saleh.
The striking workers want to see him tried on charges he plundered the company's assets and drove it into bankruptcy.
The strike stopped all flights in and out of the country's two main airports, in the capital and the southern port of Aden.