Clashes in turbulent south Yemen killed at least 78 soldiers from the Republican Guard and 25 al-Qaeda terrorists on Monday.
"The toll from the battles between the army and al-Qaida militants...has risen to at least 78," a military official told Gulf News on condition of anonymity.
"Dozens more were wounded...in the surprise attack" the official said of the clashes at army posts on the outskirts of Zinjibar.
The official said the fighting was taking place west of Abyan's provincial capital of Zinjibar.
Mlitary officials said terrorists were able to seize armored vehicles, artillery pieces, assault rifles and rockets from the stores of an army base they attacked.
Some of the heavy weapons were later used against the troops, causing most of the casualties.
Terrorists seized control of Zinjibar in May, taking advantage of political turmoil linked to the uprising against then-President Ali Abdullah Saleh.
Saleh stepped down last month in a US-backed power transfer deal that Washington hoped would allow Yemen's new leaders to move against al-Qaeda.
US military special operations troops and intelligence agencies have been aiding Yemeni forces – mostly through drone strikes – in their war with local al-Qaeda groups.
Sunday's fighting highlights the difficulties faced by Saleh's successor, Abed Rabbo Mansour Hadi, in restoring order to Yemen's lawless south.
Meanwhile, Hadi said in televised comments that fighting al-Qaeda and restoring security in the impoverished Arab nation were among his top priorities.
He spoke during a meeting with leaders of Yemen's political parties.
Saleh during his more than 30 years in power tolerated radical Islamic groups as part of a delicate balancing act that he referred to as "dancing on the heads of snakes."
There has been a surge in attacks blamed on al-Qaeda since Hadi's inauguration, which leaders in the group reportedly see as a threat to their hold in Yemen.