Most of Taez province is controlled by Shiite Huthi rebels, who are battling forces allied with UN-backed President Abedrabbo Mansour Hadi holed up in the provincial capital of the same name.
Medics at the rebel-controlled Thamar Government Hospital in Taez, Yemen's third city, said 19 Huthis had been killed in clashes over the past 24 hours.
Military sources, speaking on condition of anonymity, reported eight soldiers dead during the same period as the army closed in on the presidential palace.
A Saudi-led coalition has fought in Yemen for the past two years on the side of Hadi's government.
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A statement on Saudi Arabia's official SPA news agency today said pro-government Yemeni forces had captured the palace in Taez.
But military sources on the ground denied this, telling AFP that while government forces were closing in on the palace, they had not yet seized it.
Yemen's conflict has killed more than 8,000 people and wounded tens of thousands, according to the UN's World Health Organization.
The UN has warned that 17 million people, or two-thirds of the population, face a serious threat of famine this year.
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