"Bodies of dead people are everywhere in the streets," Qasim bin Hadi, head of security in Zinjibar in Abyan, said in a CNN report Monday.
Eight soldiers were wounded in the fighting, which has left the city a ghost town, officials said. State-run Yemen TV said at least 17 al-Qaida militants died in the fighting.
Medics at Republican hospital in Aden said at least 29 soldiers have been admitted since Saturday evening, and that all but one came from Abyan.
Sunday, more than 100 important religious and tribal leaders called for Yemen President Ali Abdullah Saleh to step down.
"Saleh was injured seriously during the assassination attempt on his life. We call on Saleh to hand over powers to his vice president Abdul Rabu Mansoor Hadi, to save the country from further clashes and bloodshed," the group said in a statement to media.
Yemen has been the site of anti-government protests for months and in recent weeks government troops have fought both anti-government tribal forces and Islamic militants, including al-Qaida in the Arabian Peninsula, CNN said.