Five Islamist fighters and two Yemeni soldiers were killed on Tuesday, a local official said, in fighting between government forces and an Islamist group that has controlled the capital of a southern province since May.

The official said the army shelled fighters from a group calling itself Ansar al-Sharia and exchanged gunfire with them in Zinjibar, in Abyan province. A colonel and another soldier were killed and three other soldiers wounded, he said.

Yemen's central government says the group is linked to al Qaeda in the Arabian Peninsula, which has plotted abortive attacks on other countries from bases in Yemen.

Opponents of Ali Abdullah Saleh - who has agreed to step down as president after nearly a year of protests pushed the country to the brink of civil war - accuse him of ceding territory to Islamists to bolster his assertion that his rule keeps al Qaeda in check.

Nonetheless, the fighting illustrates the chaos that neighbouring oil giant Saudi Arabia and Washington fear may envelop Yemen and embolden its al Qaeda wing.

Months of fighting have forced out much of the population of the province and deepened a humanitarian crisis in an impoverished country with numerous local conflicts.

(Reporting by Mohammed Mukhashaf; Writing by Joseph Logan; Editing by Tim Pearce)