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In a blow to Yemen's crumbling government, tribal fighters have taken the country's second-largest city of Taiz, according to AFP.

Clashes between tribal fighters and army troops erupted Tuesday near the presidential palace of President Ali Abdullah Saleh.

"I consider Taiz to have fallen under control" of the tribal fighters, Sheikh Hammoud Saeed al-Mikhlafi, the head of the tribal council in Taiz, told AFP.

Sheikh al-Mikhlafi told AFP that hundreds of gunmen were sent to Taiz to "protect the (anti-regime) demonstrators."

It was not immediately known whether there were casualties, but a shell fired by a tank near the palace landed in a nearby residential area, killing four people, including three children.

The sound of several explosions was also heard in the city and officials said warplanes were bombing targets on its outskirts. They could not identify those targets.

An attack on the presidential palace in Taiz on Sunday was blamed on a group recently set up to avenge the killing of anti-regime protesters at the hands of security forces.

The fall of Taiz comes as government forces killed 30 Islamic militants in Yemen's troubled southern province of Abyan in what appeared to be an escalation of a military campaign to retake areas captured by extremists amid the country's turmoil, the Defense Ministry said Tuesday.

The violence underscores fears of increasing instability in the Arab world's most impoverished country days after its embattled President Ali Abdullah Saleh left for neighboring Saudi Arabia and underwent treatment for wounds he suffered from a rocket attack that hit a mosque where he was praying inside his palace compound in the Yemeni capital on Friday.

U.S. officials reported that Saleh's condition was worse than initially thought.

The president, in his late 60's, is being treated for burns covering some 40 percent of his body, three U.S. officials said Tuesday. He is also suffering from bleeding inside his skull, the officials said on condition of anonymity because of the sensitivity of the situation.

That could mean a longer stay for Saleh in Saudi Arabia that his officials in Sanaa have indicated. Vice President Abed Rabbo Mansour Hadi, who is acting leader in his absence, insisted on Monday that the president would return home within days to resume his duties.

A Saleh return could throw Yemen deeper into chaos. It would likely spark new, more intensified fighting between opposition tribesmen and government forces, who battled for two weeks in the capital until a fragile cease-fire came into place as Saleh was rushed to Saudi Arabia on Saturday night. The tribesmen and Yemen's opposition want the evacuation to mean the end of Saleh's rule and for him to stay out of the country.

The United States and Saudi Arabia are rushing to put together an immediate transition of power in Saleh's absence to allow a new unity government to be formed. Washington fears that the chaos in the country will allow al-Qaida's powerful branch in the country greater freedom.

The fighting in Zinjibar, the capital of the southern Abyan province, stoked those fears. Islamic militants overwhelmed the city late last month, according to witnesses and military officials.

The Yemeni government claims the militants are connected to Al Qaeda. But their identity remains unclear. There are numerous armed Islamic militants in Yemen, most of them not directly members of the terror network, and many of them sometime-allies of Saleh's government. Saleh, for example, used armed extremists to fight secessionists in the south in a 1994 civil war and in more recent uprisings.

Government warplanes bombed areas around Zinjibar on Tuesday, according to witnesses and military officials.

The Defense Ministry said its forces carried out "cleansing operations" in Zinjibar and its outskirts late Monday and Tuesday, killing more than 30 militants. Among the dead, it said, was an Al Qaeda figure, Hassan al-Aqili, who was a commander for the terror group in the neighboring province of Marib and was accused last year of killing a senior army commander there.

Amid the fighting, dozens of militants attacked an army position outside Zinjibar, prompting a gunfight that left nine soldiers and six of the attackers dead, according to the military officials, who spoke on condition of anonymity because they weren't authorized to release the information. The army regained control of the post after hours of fighting.

Government troops also shelled Jaar, another town in Abyan that was seized by militants, the officials said. Four militants were killed in the bombardment, they said.

In a separate incident, Saudi Arabia said its border guards killed a Yemeni gunman who opened fire while trying to cross into Yemen in a jeep at a crossing near Najran, 60 miles inland from the Red Sea, early Tuesday. The Saudi statement said two guards were killed. No further details about the gunman were given. Infiltration in both directions along the 800-mile desert border is common.

The Associated Press contributed to this report.