A roadside bomb targeting a security patrol killed three children on their way to school, Yemen's defence ministry said, following another day of clashes between forces loyal to the government and al-Qaeda-linked fighters.
The al-Qaeda-linked Ansar Al Sharia group denied involvement.
Many locals in the southern town of Lawdar have taken up arms in support of the government forces in the area, as Yemen's military has been on the offensive following an attack on an army camp outside the town last week.
Fighters are said to be exploiting weakened central government control following the political turmoil that unseated Yemen's former president last year.
Al Jazeera's Charles Stratford reports.