Fifteen soldiers and three Al Qaeda militants were killed in clashes in southern Yemen on Friday, Xinhua reported.
The fighting began after militants seized the Lodar city of Abyan province.
Eight soldiers were killed when militants fired a rocket-propelled grenade at their vehicle.
Seven more troops were killed in a gunbattle with militants, an official said requesting anonymity. Three militants died in the gunfight.
Security forces have cordoned off the city, and more troops were dispatched to the area. Yemen is ancestral home of Al Qaeda chief Osama bin Laden.