The official says the shells landed today in Dali as mourners were paying condolences to the family of a man killed in clashes between security forces and gunmen affiliated with a southern regional movement.
The official and leader Adnan Abdo, who says he was at the site of the attack, say four shells hit.
The official said that authorities are investigating. He spoke anonymously because he was not authorised to speak to the press.
A strong southerners' movement demands greater autonomy from the north after what it describes as two decades of marginalisation and discrimination. South Yemen was an independent state until unification in 1990.