Yemen says army beating militants in southern city

Anti-government protesters shout slogans during a demonstration to demand the ouster of Yemen's President Ali Abdullah Saleh in the Damt town of the southern Dhalea province June 20, 2011. The banner reads: ''The people want a transitional council.''

ADEN, Yemen (Reuters) - Yemeni authorities said government forces made progress on Monday in efforts to dislodge Islamist militants holding the southern city of Zinjibar.

"The army is besieging the remnants of the terrorists and is on the verge of completely cleansing Zinjibar," the local provincial governor, Saleh Hussein al-Zuari, said in comments on the Yemeni defence ministry's 26 September website.

It was not possible to verify his statement. No comment was available from the armed Islamist group in the city.

A military spokesman said troops had killed 17 militants as of Monday -- five more than the figure given on Sunday, the first day of the offensive in Zinjibar. Five soldiers had died and 21 were wounded, the military added.

Last month's seizure of Zinjibar, capital of Abyan province, caused thousands to flee and raised fears that militants with ties to al Qaeda were gaining ground as veteran President Ali Abdullah Saleh resisted pressure from his U.S. and Saudi allies to stand down in favour of a transition to democracy.

Saleh has been in a Saudi hospital since being wounded in an attack on his palace on June 3, but he retains power.

Saleh's opponents say his forces handed over Zinjibar to the militants in order to bolster his argument that his departure would lead to an Islamist takeover of the poor Arab state.

(Reporting by Mohammed Mukhashaf; writing by Sami Aboudi; editing by Alastair Macdonald)