The city of Marib and its surrounding oil fields make up the last significant pocket of government-held territory in the north, the rest of which is under Houthi rebel control, including the capital Sanaa.
Heavy fighting near the Yemeni city of Marib has killed 96 combatants over the past two days as Houthi rebels press their offensive on the government's last northern toehold, loyalist commanders said.
"Clashes between the two sides on several fronts in the Marib area on Wednesday and Thursday killed 36 loyalists troops and 60 rebels," one government military source said.
The Iran-backed Shia rebels rarely disclose their own losses.
Aircraft of a military coalition led by Saudi Arabia provided air support to government ground forces.
The Houthis are "keeping up their slow advance on Marib and now constitute a very real threat on the Kassara and Mashjah fronts, northwest of the city," another loyalist military official said.
The loss of Marib would be a heavy blow for the Yemeni government, currently based in the southern city of Aden, and for its Saudi backers.
The city of Marib and its surrounding oil fields make up the last significant pocket of government-held territory in the north, the rest of which is under rebel control, including the capital Sanaa.
The city's fall could also lead to humanitarian disaster, as vast numbers of civilians displaced from fighting elsewhere have sought refuge in the area.
Around 140 camps have sprung up in the surrounding desert to provide basic shelter for up to two million displaced, according to the Yemeni government.
US Secretary of State Antony Blinken has warned that the suffering will only end when a political solution is found between the Houthis and the government.
The rebels see Marib as a strategic prize that will give them more bargaining power in peace talks that Washington says must begin soon.
The conflict has killed tens of thousands of people since Saudi Arabia and its allies intervened in 2015.
Millions have been pushed to the brink of famine, in what the the United Nations has described as the world's worst humanitarian crisis.