Updated

A shootout between Yemeni security forces and members of the country's disgruntled southern independence movement killed two separatists and wounded 18 people on Thursday, security and medical officials said.

The clash came as Yemenis marked the first anniversary of President Abed Rabbo Mansour Hadi's election. The vote — a one-candidate referendum — was part of U.S.-backed power transfer deal following a year-long uprising that ousted longtime autocratic ruler Ali Abdullah Saleh who stepped down in return for immunity from prosecution.

The shooting erupted after thousands of pro-Hadi demonstrators gathered to celebrate the anniversary in a main square in the port city of Aden. The officials said separatist fighters tried to storm the gathering, prompting security forces to open fire.

A firefight ensued and gunfire was heard all around the city, said the officials. Four of the wounded were Yemeni army soldiers, the officials said, speaking on condition of anonymity because they were not authorized to speak to the media.

Since taking over, Hadi has tried to bring the country together, carrying out a shake-up of the divided military, removing Saleh's relatives and loyalists from senior positions and leading a campaign against al-Qaida militants in the south with the help of the United States. He has also pushed for a national dialogue that would include all rival political and social groups.

Among the challenges he is facing is the mounting separatist sentiment in the south, a region that was an independent state until unification with the north in 1990. Under Saleh, the south suffered years of discrimination and unfair distribution of resources. Most southern Yemenis are believed to back an autonomous state but they are not in favor of armed militias within the separatist movement and do not back an armed fight against government troops.

"Unity has failed and a new political system must be establishment," said Yassin Said Noaman, a top leader of Yemen's Socialist party, one of the biggest in parliament. He added that unity has only led to marginalization of the south and that as long as Hadi struggles with other issues, he will not be able to hold the country together and "alienation will continue."

The separatists in the south are also deeply divided, with different factions disagreeing on how to deal with the central government in the capital, Sanaa. One of the southern leaders, former Interior Minister Mohammed Ali Ahmed, says he welcomes national dialogue but needs guarantees that any deals would eventually be implemented.

Others, such as the former vice president Ali Salim al-Beidh who leads a more militant wing, reject national dialogue. Al-Beidh fled Yemen after a 1994 attempt to declare independence of the south failed, sparking civil war, and now lives in exile.

The U.N. Security Council warned al-Beidh last Friday of sanctions if he continued to interfere in Yemen's democratic transition. The warning came after al-Beidh was accused of receiving funds from Iran and integrating former al-Qaida members in his movement.

Last month, Yemen's navy seized a ship loaded with wide variety of Iranian-made weapons, including missiles and rockets. The government in Sanaa asked the Security Council to investigate while Iran, the region's main Shiite powerhouse, denied involvement. For years, Yemen has been fighting Shiite Muslim insurgents near the country's border with Saudi Arabia.

Hadi, who is from the south, enjoys wide support among Aden residents and his posters have remained untouched in the city, despite frequent protests by separatists and clashes with government troops. Day's ahead of Thursday's anniversary, heavy security forces were deployed and dozens of armed vehicles and troop carriers patrolled the streets around Aden.