Al Qaida militants have seized full control of a town south of the Yemeni capital, over-running army positions, storming the local prison and freeing its inmates.
The capture of Radda in Bayda province, 100 miles from Sanaa, underscores the growing strength of al Qaida in Yemen as it continues to take advantage of the weakness of a central government struggling to contain nearly a year of massive political unrest.
Security officials said around 200 militants threw a security ring around Radda, preventing residents from leaving or entering, and killed two soldiers and wounded a third in clashes with army troops.
They pushed into the town from several points they had captured over the weekend, including an ancient castle, a school and a mosque. They freed 150-200 inmates, including an unspecified number of militants belonging to al Qaida.
Bayda province is a key transit route between the capital and Yemen's southern provinces where the al Qaida militants are most active. Islamist militants have already seized control of a swath of territory and towns in Abyan province in southern Yemen.
Yemen's opposition has accused embattled President Ali Abdullah Saleh of trying to wreck a power transfer deal he signed last month by allowing security to deteriorate in the south of the country as a way of arguing that he must stay in power, which he has held since 1978.
The West has long considered Mr Saleh a necessary ally in the fight against Yemen's active al Qaida branch, which has been linked to terror attacks in the US and is believed to be one of the international terror organisation's most dangerous franchises.