Clashes continued throughout the afternoon, tribesmen said.

"We will cleanse Al-Masaneh of Al-Qaeda after the killing of Tarek al-Dahab," Basil al-Salami, a member of Al-Qaifa tribe which is involved in the battles against Al-Qaeda in the town, told AFP.

"Our tribes fear Al-Qaeda which poses a danger to our region. We will never allow our villages to be targeted by US strikes like Abyan and Shabwa," said an Al-Qaifa tribal chief, referring to two provinces where Yemeni troops backed by US drones have been battling extremists.

A tribal chief said that Hizam was "pushed by authorities" to kill Dahab who had in January taken over control of the town of Radah, about 130 kilometres (85 miles) southeast of Sanaa, and 30 kilometres (19 miles) from Al-Masaneh.

Dahab was appointed a local "emir" or prince when his gunmen took over Radah. But they were forced to withdraw from the town after holding it for nine days, bowing to tribal pressure.

Tarek al-Dahab was married to the sister of slain US-born radical cleric Anwar al-Awlaqi who was killed in a suspected US drone strike in September.

Awlaqi was the first US citizen to be put on a US list of militants targeted for assassination. He was believed to be the leader of overseas operations for Al-Qaeda in the Arabian Peninsula (AQAP), the group's deadliest global branch.

On the northern and eastern outskirts of Abyan's capital Zinjibar, Al-Qaeda militants traded machine gun fire with the army at dawn on Thursday, wounding eight soldiers, a military official told AFP.

The soldiers were taken to a military hospital in the main southern city of Aden, a medic there added.

A local official in the adjacent town of Jaar, an Al-Qaeda stronghold, said that one extremist was killed and another was wounded in the fighting.

In May, the extremists took control of Zinjibar, triggering nine months of fighting between militants and government troops.

Tribal and government officials said on February 4 that the government is trying to negotiate the withdrawal of the extremists from the city, which is the capital of Abyan province.

So far, at least three tribal-mediated negotiation attempts to secure a militants withdrawal have failed.

Hundreds of people have been killed in the fighting and more than 90,000 residents displaced.

In August, the UN Security Council said it was "deeply concerned at the worsening security situation, including the threat from Al-Qaeda," in Yemen.

AQAP and its local affiliates, the Partisans of Sharia (Islamic law), have taken advantage of almost a full year of deadly protests against outgoing President Ali Abdullah Saleh to bolster their presence in the south and southeast.

Saleh is in the United States for medical treatment after being seriously wounded in a bombing at the presidential palace in Sanaa in June.

In November, after 10 months of bloody protests, he signed the deal by which he transferred constitutional powers to his deputy Abdrabuh Mansur Hadi who is the sole candidate for February 21 presidential polls that will end Saleh's 33-year-long rule.