"Two soldiers were killed and two others wounded in clashes between militants from the Southern Movement and the Yemeni army" in an area between Habilayn and Al-Milah, a local official told AFP.
Medics in the southern province said the local hospital had also received four wounded soldiers on Sunday.
Security officials, meanwhile, said army reinforcements had reached Al-Milah, 20 kilometres (12 miles) from the town of Habilayn which has been under the control of southern gunmen for several weeks.
"We have passed the Al-Milah region and are heading towards Habilayn," one official said, on condition of anonymity, adding that the army was locked in battle with armed men in the region between Habilayn and Al-Milah.
"Dozens of southern militants have been deployed in the mountains surrounding the town since Sunday evening in anticipation of an army attack," a witness in Habilayn said.
A resident of Al-Milah said: "We are living in fear as our homes are sometimes targeted in the attacks. Ten houses and a farm have been destroyed in clashes" over the past week.
Yemeni authorities have blocked the roads to and from the region and cut off all forms of communication "for security reasons," according to another security official.
In response, local residents have gathered in Huta, the capital of Lahij, to urge the Sanaa government to allow them to enter their towns.
"We insist on our choice of peaceful resistance and condemn the army`s raids in Al-Milah and Habilayn," said a Southern Movement leader in the area, Fadel Hammash.
"We call on rights and humanitarian organisations inside and outside Yemen to condemn the assault against us."
In addition to grappling with an increasingly violent southern separatist movement, the Yemeni government is struggling against a growing presence of Al-Qaeda fighters in the south.
South Yemen was independent from the 1967 British withdrawal from Aden until the region united with the north in 1990. The south seceded in 1994, sparking a short-lived civil war that ended with it being overrun by northern troops. (*)
Editor: Kunto Wibisono
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