Terrorists aligned with Al Qaeda are in control of Jaar, the historical capital of the Yemen province of Abyan, a Yemeni official briefed on the intelligence data told Fox News.
Al Qaeda in the Arabian Peninsula, the terrorist group's branch in Yemen, has taken hold of the town, along with former elements of a group known as Aden-Abyan Islamic Army. The Yemeni military is actively negotiating with the groups, who have yet to gain control of the entire province, the official says.
Abyan has been a focus of U.S. and Yemeni government counterterrorism activities because it is believed to be the main foothold for the Al Qaeda affiliate, which -- with the American cleric Anwar al-Awlaki playing a key role -- is now considered a greater threat to U.S. national security than Usama bin Laden and the remnants of his network in Pakistan.
There has been little government presence or authority in Abyan historically, but Fox News is told that the Yemeni armed forces moved troops closer to Abyan -- an area with ties to the country's vice president and a top general.
Within the last week, Al Qaeda in the Arabian Peninsula and other extremist groups in the region surrounded a smaller military company, which eventually had to withdraw because no reinforcements were available due to the protests in the captiol Sanaa.
The Yemeni official with knowledge of the intelligence confirmed that this allowed the terrorist group, the tribes and others groups to overrun the ammo dump in Jaar, and they were able to arm themselves and control the town.
This is described as a complex situation with no one group in overall control.
These advances come as longtime Yemen ruler Ali Abdullah Saleh faces increased pressure to step down amid an intensifying protest movement. Saleh, a partner of the Obama administration in targeting Al Qaeda, has offered to step down at the end of the year, but protesters have rejected that and other offers short of his immediate exit.
Catherine Herridge is an award-winning Chief Intelligence correspondent for FOX News Channel (FNC) based in Washington, D.C. She covers intelligence, the Justice Department and the Department of Homeland Security. Herridge joined FNC in 1996 as a London-based correspondent.