A senior al-Qai'da leader has been killed in an airstrike by a US drone.
Fahd al-Quso was on the FBI's most-wanted list for his part in the bombing of the warship USS Cole in 2000.
He was hit by a missile fired from the unmammed CIA aircraft on Sunday as he and another al-Qai'da operative stepped out of a vehicle in the southern province of Shabwa, Yemeni officials said.
The strike was carried out after an lengthy surveillance operation by the intelligence agency and the US military. America and Yemen are locked in a battle against al-Qai'da insurgents in the south of the country.
The new Yemeni President, Abed Rabbo Mansour Hadi, has promised improved co-operation with Washington to combat the militant threat. But in a sign of the group's growing power, just a few hours after the drone attack, fighters from al-Qa'da in the Arabian Peninsula, the terror group's arm in Yemen, attacked a Yemeni army base in the south, killing 20 soldiers and capturing 25.
It was not immediately clear if the pre-dawn attack on the military base in Abyan province was in retaliation for the death of the militant leader.
Al-Quso, 37, was on the FBI's most-wanted list, with a $5m reward for information leading to his capture.
He had been indicted in the US for his role in the bombing of the USS Cole while she was docked in the Yemeni port of Aden. Seventeen sailors were killed and 39 injured.
He served more than five years in a Yemeni prison for his role in the attack and was released in 2007.