Governor of the Yemen's southeastern province Hadramawt said on Saturday Yemeni government forces backed by an Arab coalition seized an Al Qaeda training camp along with "large amounts" of weapons.
News comes during an offensive launched last month to recapture areas in the south of the country which is overrun by Al Qaeda additionally on Sunday loyalist forces recaptured Hadramawt provincial capital of Mukalla, which the militants had occupied for a year.
"The offensive is continuing in Qoton to hunt down Al Qaeda militants," said the governor Major General Ahmed bin Braik, referring to a town north of Mukalla.
Braik said government forces overran an Al Qaeda camp in the town where they "confiscated large amounts of weapons" and "arrested eight Al Qaeda militants."
"Mukalla is now a safe city," Braik added.
Government troops which seized the city were backed by special forces from Saudi Arabia and the United Arab Emirates, as well as coalition air strikes, the alliance said in a statement.
At least 27 Yemeni soldiers died in the fight to retake Mukalla, military officials and medics said.
While the coalition has said that more than 800 militants were killed, Al Qaeda issued a statement on Monday denying the claim as "lies" and saying its dead "do not exceed the number of fingers on both hands."
The statement addressing Hadramawt residents and signed by Ansar al Sharia, another name for Al Qaeda in Yemen, said that the militants withdrew only to spare Mukalla from destruction.
"We will fight the battle by our own rules and ways and not by those of the enemy," said the statement, adding that the UAE had played the biggest role in the fight for Mukalla.
An officer said residents of Mukalla, home to an estimated 200,000 people, had appealed to the militants to pull out.
The Yemen-based Al Qaeda in the Arabian Peninsula (AQAP) is regarded by Washington as the network's most dangerous branch, and AQAP militants have come under repeated US air and drone strikes.