At least one person was killed Saturday in clashes between insurgents linked to al-Qaeda and residents in Yemen's south-eastern town of Rada'a, Yemeni news website Mareb Press reported.
The fighting erupted when al-Qaeda militants attacked the district of Haziz in Rada'a in a bid to capture it, the website said, quoting local sources.
This week, more than 200 armed radicals seized army positions and the famous al-Amiriya castle in Rada'a, making it the closest town to the Yemeni capital Sana'a to be controlled by al-Qaeda-affiliated militants, dpa reported.
In the past two days, they have been pushing for a bigger foothold in the town, located 150 kilometres south-east of Sana'a.
Their chief, Tariq al-Dahab, is a relative of al-Qaeda's spiritual leader in Yemen, Anwar al-Awlaki, who was killed in a US airstrike last year.
Forces of the government's elite Republican Guards, positioned on the outskirts of Rada'a, on Saturday shelled the castle held by the insurgents, Mareb Press reported. There were no immediate reports of casualties.
Militants - believed to be affiliated to al-Qaeda - have taken advantage of a year of political turmoil in Yemen to expand their influence in the impoverished Arabian Peninsula country.
The opposition accuses the authorities of complicity with the insurgents, as a means of extending President Ali Abdullah Saleh's grip on power.
Saleh has portrayed himself as the only one who can fight al-Qaeda insurgents, and has used the threat of militants to seek support from the West and extend his stay in power despite months of protest against him.