Yemen's president is taking important steps to advance the country's transition to democracy and security forces are having some success against al-Qaida — but the terrorist group remains intent on striking both Western and regional targets, the U.N. envoy to Yemen said Tuesday.

Jamal Benomar told the U.N. Security Council that despite President Abed Rabbo Mansour Hadi's "strong leadership," Yemen's transition is taking place "against a backdrop of serious security concerns, an unprecedented humanitarian crisis and many unresolved conflicts."

Hadi was sworn in on Feb. 25 to replace longtime leader Ali Abdullah Saleh, following an uncontested election aimed at ending more than a year of political turmoil.

The transition — which envisions the completion of a constitution in late 2013 enabling general elections to take place in February 2014 — is proving to be bumpy. Hadi is trying to restructure powerful security forces packed with Saleh loyalists, launch a national dialogue that includes the southern secessionist movement, and appease a restless religious minority in the north as well as disparate opposition groups in the heartland.

Benomar said the scale of the humanitarian crisis "is unprecedented and the figures are much bleaker than previously reported."

He said 10 million people — almost half the population — are not getting enough to eat and almost one million children under the age of five are suffering from malnutrition. Five million Yemenis need immediate assistance but donors have only funded 43 percent of the $455 million needed to tackle the humanitarian crisis, he said.

On the security front, Benomar said al-Qaida in the Arabian Peninsula "continues to pose a major threat."

"However, president Hadi's efforts to combat the advance of al-Qaida in the south and elsewhere are beginning to bear fruit," he said.

Benomar said the southern city of Loder has reportedly been retaken by the Yemeni army and "significant inroads" have been made in the towns of Jaar and Zinjibar, but the town of Shukra remains under control of Ansar al-Sharia, an al-Qaida-linked group.

In addition, he said separatist sentiments in the south "have been on the rise."

Military officials said Yemen's army pressed an offensive on Tuesday against southern towns. Clashes around Jaar, which fell to the militants more than a year ago, left eight al-Qaida fighters and two soldiers dead over the past 24 hours, they said.

Benomar said al-Qaida in the Arabian Peninsula and Ansar al-Sharia "have extended their reach into areas previously not associated with their activities."

A terrorist bombing of a military parade that killed 96 soldiers in the capital last week, as well as a recent foiled airliner bomb plot, are reminders that al-Qaida in the Arabian Peninsula "remains the most lethal al-Qaida affiliate intent on striking both Western and regional targets," the U.N. envoy said.

Benomar said abductions, assassinations and hostage-takings have also increased in the past few weeks, while oil and gas pipelines and electricity lines continue to be attacked frequently.

"Many of these attacks are politically motivated while others are criminal acts committed in the context of the lawlessness that prevail in parts of the country," he said. "These attacks and sabotage cost the state an average loss of revenue for the national budget of around $250 million per month or $3 billion per year."

Yemen is the poorest country in the Arab world and "this loss of revenue is a crime against the Yemeni people," Benomar said.

He warned that continued obstruction of Hadi's reorganization and control of the military and security forces "could derail Yemen's fragile transition process and could result in serious instability."

But Benomar said a planned National Dialogue Conference bringing together all sectors of society could shape the country's democratic future and create greater stability and security.

"The success or failure of the National Dialogue is likely to make or break Yemen's transition," Benomar said, and the U.N.'s top priority in the coming months will be to help ensure its success.