Former soldiers loyal to deposed president Abdullah Saleh have allied themselves with the Iranian-backed Houthi rebels to control Taiz palace
Yemeni government forces fought against Iranian-backed Houthi militia to capture a rebel-held presidential palace in the southwestern province of Taiz after clashes killed 27 people, medics and military sources said.
Most of Taiz province is controlled by Shia Houthi rebels, who are battling forces allied with UN-backed President Abd Rabbuh Mansour Hadi holed up in the provincial capital of the same name.
Medics at the rebel-controlled Thamar Government Hospital in Taiz, Yemen's third city, said 19 Houthis had been killed in clashes over the past 24 hours.
Military sources, speaking on condition of anonymity, reported eight soldiers dead during the same period as the army closed in the presidential palace.
The palace is under the control of the Houthis, who are allied with former soldiers who are loyal to ousted president Ali Abdullah Saleh.
A Saudi-led coalition has fought in Yemen for the past two years on the side of Hadi's government.
A statement on Saudi Arabia's official news agency on Saturday said pro-government Yemeni forces had captured the palace in Taiz.
Military sources on the ground denied this, telling AFP that while government forces were closing in on the palace, they had not yet seized it.
Yemen's conflict has killed more than 8,000 people and wounded tens of thousands, according to the UN's World Health Organization.
More than 500 people have died of cholera and another 55,200 left ill in recent weeks in Yemen, the poorest country in the Arab world.
The UN has warned that 17 million people, or two-thirds of the population, face a serious threat of famine this year.