Yemeni security officials said that an explosion followed by what sounded like heavy gunfire had been heard near the US Embassy in the capital Sanaa late Monday, but government spokesmen later said that the blast was fireworks from a wedding procession.
The State Department also issued a statement saying it had no indication that reports of an attack on or near the US Embassy in Yemen were accurate.
The reports came amid what appeared to be a security alert in the Yemeni capital, where the local branch of al Qaida periodically stages high-profile attacks.
Extra security troops could be seen deployed since Sunday and motorcycles were absent from main streets.
They had been banned during past alerts to prevent them from being used to carry bombs.
Two security officials in Yemen told The Associated Press by phone that the explosion occurred near the embassy, followed by the sounds of gunfire.
One said troops had sealed off the area. They spoke anonymously as they were not authorized to talk to media.
But Mohammed al-Mawri, an official at the Yemeni Interior Minister's office, said the blast was fireworks from a wedding procession.
A Yemeni Embassy spokesman in Washington, Mohammed Albasha, gave the same account and said police detained individuals who lit them.
Wedding guests sometimes fire guns into the air in celebration in Yemen, but that would be unusual in the area near the embassy, a heavily secured, upscale part of the capital home to several other diplomatic facilities and a hotel used by US officials.
The Yemeni government is fighting a war against al Qaida's local branch, considered by Washington to be one of the world's most dangerous offshoots of the terror network.
The US and Britain evacuated diplomatic staff from Sanaa in August after learning of a threatened attack that prompted Washington to close temporarily 19 diplomatic posts in the Middle East and Africa.