Al Qaeda militants swept into the southern Yemeni town of Rada overnight and overran it within hours, in a key military advance by the Islamists, local and tribal officials said on Monday.
The takeover of Rada, 130 kilometres (80 miles) southwest of Sanaa, was the latest in a series of southern towns and cities to fall as Al Qaeda takes advantage of a weakened central government reeling from months of protests.
Rada lies only 30 kilometres from the main highway connecting the capital Sanaa and Yemen's southern and southwestern regions.
"Al Qaeda has taken over the town and is now the de facto power there," a local official told AFP on condition of anonymity.
"The government's security forces have retreated to their bases and militants are now manning the checkpoints in and out of the town," he added.
The official, a senior member of the local government, said the militants had also seized the town's central prison and police headquarters.
According to a local tribal chief, more than 100 prisoners were released, "including members of Al Qaeda." Two soldiers guarding the prison were killed, local officials said.
The takeover began late Sunday and was completed by dawn on Monday without any significant resistance from local security forces stationed in the area, according to tribal officials.
"There were barely any clashes at all," one local tribal leader told AFP.
Tribesmen have accused the government of complacency and said despite repeated warnings, the government had done little to prevent Rada's fall.
"We've been warning the authorities about the Al Qaeda threat for months. We told them that their actions and behaviour pointed to their intentions to take over," local tribal leader Sheikh Ammar Al Teiri told AFP.
"The government has absolutely no role here anymore," he added.
According to Teiri, local tribesmen decided to join forces and help protect the city from an Al Qaeda invasion, "but they showed up in such force it became clear that in this town at least, they were stronger than the state," he said.
The takeover of Rada was accompanied by what appears to be the formal appointment of a local "emir," or prince, to govern the newly seized territory, a posting given to the brother-in-law of slain US-born cleric Anwar Al Awlaqi.
Tareq Al Dahab, who is married to Awlaqi's sister, was named to the post, tribal officials said.
Anwar Al Awlaqi, the first US citizen to be put on a US list of militants targeted for assassination, was killed on September 30 in a suspected US drone strike in Yemen.
He was believed to be the leader of overseas operations for Al Qaeda in the Arabian Peninsula (AQAP), the group's deadliest global branch.
In August, the 15-member 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 President Ali Abdullah Saleh to bolster their presence in the southeastern Shabwa province and nearby Marib.
Abyan province of southern Yemen, however, has been the main target of Al Qaeda's growing strength, with militants taking control of the provincial capital Zinjibar in May and capturing several other towns since.
Hundreds of militants and soldiers have been killed in battles between Islamist fighters and government forces trying to retake captured territories.