Yemen's exiled government has been fighting a war backed by Saudi-led air strikes and ground forces to win back the capital of Sanaa from the Houthis, whom it views as a proxy of Tehran.
Backed up by local tribes and militias, army forces attacked the city of Beihan in southeastern Shabwa province which sits on a main road leading to Sanaa some 100 km (62 miles) away.
Military and local officials said several fighters on the Houthi side were killed and injured in the battle adding that government forces were advancing deeper into the town.
The Shia Muslim Houthis, who took power in late 2014, deny they are puppets of Iran and say their armed fight is a revolution against corruption officials.
Home to Yemen's largest industrial project, a now-shut liquefied natural gas export facility at Belhaf, Shabwa is divided among al Qaeda, government troops loyal to President Abd-Rabbu Mansour Hadi, Houthi forces and armed tribes.
Clashes have repeatedly broken out there between Houthi and pro-Hadi forces despite a ceasefire which began on April 10, which has mostly stopped fighting and buttressed weeks of inconclusive UN-backed peace talks in Kuwait.