The officials said 15 Shiite rebels, known as Houthis, were killed in the fighting near the Aqaba Tharaa area, where anti-rebel forces were advancing from Abyan into Bayda province.
The officials, who hailed from both sides of the conflict, said the rebels destroyed at least eight armored vehicles and four tanks, which were left burning. The officials said both sides were rushing reinforcements to the area, with the Houthis attempting to squeeze the pocket closed and their opponents attempting to break out.
All officials spoke on condition of anonymity because they were not authorized to brief the media.
Yemen's conflict pits the Houthis and troops loyal to former President Ali Abdullah Saleh against southern separatists, local and tribal militias, Sunni Islamic militants and troops loyal to President Abed Rabbo Mansour Hadi, who is in exile in Saudi Arabia. The Saudis are leading a U.S.-backed Arab coalition that is carrying out airstrikes against Houthi forces.
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The Saudi-backed groups fighting the Houthis and their allies have made rapid gains in the south in recent weeks, after taking the southern port city of Aden in July. Using Aden as a resupply point, they have moved forces, including Saudi-trained Yemenis and armored units, northward, seizing nearby Shabwa province from the rebels last weekend.
The Houthis have meanwhile taken control of the United Arab Emirates embassy in the capital Sanaa, prompting condemnation from Emirati and Egyptian authorities.
Today, Egypt's Foreign Ministry urged the Houthis to withdraw from the premises following the seizure on Sunday.
The Emirates, along with Saudi Arabia, Bahrain and Qatar, have also condemned the takeover of the embassy. All are part of the Saudi-led coalition that has been bombing the Houthi rebels and their allies since March.