Reuters reports that Al-Qaeda militants took over the town of Azzan on Monday.
Azzan is a major social and commercial hub, previously under control of Al-Qaeda in 2012. The city is on a major road that links two provincial captials in the south.
Al-Qaeda militants surrounded the city and the defending tribal militas did not offer resistence.
"Dozens of al-Qaeda gunmen arrived in the early hours of the morning and set up checkpoints at the entrances to the town and in its streets. They planted their black flag on government buildings," an Azzan resident said to Reuters.
This is the second Al-Qaeda takeover since the Yemen war began in March 2015. The group also holds control of the port city Mukalla.