Military officials and witnesses say dozens of gunmen are attacking the presidential palace at Taiz, Yemen's second largest city, and have killed four soldiers in an attempt to storm the compound.
They said one of the attackers was also killed in the violence on Sunday. The officials spoke on condition of anonymity because they were not authorised to talk to the media.
The attackers belong to a group set up recently to avenge the killing of anti-regime protesters at the hands of President Ali Abdullah Saleh's security forces.
Saleh left the country overnight for medical treatment in Saudi Arabia after he was wounded Friday in an attack on his compound in the capital Sanaa.