Al Qaeda militants took control of a western district of Yemen's main port city of Aden on Saturday night, residents said, in another sign that the group is drawing strength from five months of civil war.
The entrance of Al Qaeda in the Arabian Peninsula into Aden, once one of the world's busiest ports and the most secular and secure parts of an otherwise restive country, would be one of its biggest gains yet.
"Dozens of Al Qaeda militants were patrolling the streets with their weapons in total freedom in a number of areas in Tawahi. At the same time, others raised the Al Qaeda black flag above government buildings, including the administrative building of the port," a resident told Reuters.
United Arab Emirates forces based in Aden meanwhile freed a British hostage who had been held by the group, the UAE state news agency WAM said on Sunday.
The hostage, earlier identified by a Yemeni police source as an oil worker abducted in February last year, was taken to the Emirati capital Abu Dhabi on a military plane on Saturday night, the agency said.
Britain's Foreign Office confirmed in a statement that the hostage was "extracted by UAE forces in a military intelligence operation" and was "safe and well."
Forces loyal to Yemen's exiled government in Saudi Arabia retook the city from Iran-allied Houthi militia last month, with heavy backing from the kingdom and other Gulf Arab countries with air strikes, training and deployment of special forces.
Gulf countries are seeking to fend off what they see as Iranian influence on their neighbour, while the Houthis say they are fighting a corrupt government in league with the al Qaeda militants.
Militiamen loyal to the exiled Yemeni government have ruled Aden's streets for five weeks as services lapsed, ruins from earlier battles went unrepaired and policemen and army units were largely absent.
But militants from al Qaeda in the Arabian Peninsula, the global group's deadliest branch, have woven themselves among southern fighters battling the Shi'ite Muslim Houthis since the war began in March 26, gaining itself legitimacy and territory.