Mohammed Saeed, 25, was standing outside his home in Huta the capital of the southern Lahj province when a gunman shot and wounded him, the official said.
Late Monday, two militants from the Al-Qaeda-affiliated Ansar al-Sharia group, which is on the US terror list, shot dead 20-year-old Hashem al-Asmi, also in Huta, also for allegedly being "gay".
Ansar al-Sharia is the local branch of Al-Qaeda in Yemen where the network, although weakened, is still active mainly in the southern and eastern parts of the country.
Mohammed Abbad was a member of the Popular Resistance Committees which had helped the army launch a month-long offensive in May last year against Al-Qaeda militants in Abyan.
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The army, also backed by US drone attacks, managed to retake control of the country's south, of which large swathes of land had been seized by Al-Qaeda militants.
Although weakened the network still carries out hit-and-run attacks against army and police targets and occasionally assassinates members and leaders of the Popular Resistance Committees.
Elsewhere in south Yemen, the separatist Southern Movement said that two of its top leaders Salah Shanfara and Khaled Masaad were the targets of a failed assassination bid.
The men came under gunfire in the southern Daleh province late Thursday, the group said in a statement, holding the Sanaa government responsible of the attack.
The Southern Movement seeks autonomy or secession for the formerly independent south.
Southerners have complained of discrimination and being marginalised ever since.