Yemeni officials say Shi'ite Houthi rebels and their allies fought their way through the center of Aden Thursday and seized the presidential palace in the key southern port city.
The rebels have been driving deeper into Aden in recent days while battling forces loyal to internationally backed President Abd-Rabbu Mansour Hadi, who fled Aden last week.
The capture of Aden, the last remaining stronghold of those backing Hadi, would mark a setback for the Saudi-led coalition, which has been carrying out airstrikes for more than a week across Yemen.
At a news conference in the Saudi capital, Riyadh, a Saudi defense official said he believes the situation in the city is "relatively stable and calm."
Earlier, al-Qaida militants stormed a prison in southern Yemen on Thursday, freeing 300 inmates as fighting continued in other parts of the country between Shi'ite Houthi rebels and pro-government forces.
Security officials said Khalid Batarfi, a prominent figure with al-Qaida in the Arabian Peninsula, was among those freed from the prison in al-Mukalla.
Separately, the official Saudi Press Agency reported a Saudi border guard was killed after coming under fire from Yemeni territory. The killing marks the first known Saudi casualty since the country launched an operation against the Shi'ite rebels a week ago.
Also Thursday, Human Rights Watch said one of those airstrikes that killed at least 29 people earlier this week "raised grave concerns about violations of the laws of war."
The group called on the forces involved in the attack to conduct an investigation, and for the United States, which is giving logistical and intelligence support, to make sure precautions are being taken to protect Yemeni civilians.
"The deaths of so many civilians in a camp with no apparent military target heightens concerns about laws-of-war violations," said Joe Stork, HRW's Middle East and North Africa director.
United Nations Secretary-General Ban Ki-moon said he was "deeply concerned" about the attack Monday on the Al-Mazrad camp in northern Yemen as well as other civilian casualties in Yemen.
On Wednesday, at least 35 people died in an explosion at a dairy in western Yemen. The cause of that blast has not been determined with conflicting reports about whether another airstrike or anti-government fighters were responsible.
Yemen's foreign minister said Wednesday the coalition needs to expand the fighter to include sending ground troops to Yemen. Riyadh Yassin told the French news agency the move is necessary because "at some stage airstrikes will be ineffective."
Yassin also said ground forces would cause fewer civilian casualties and would help in aid deliveries.
Some material for this report came from AP, AFP and Reuters.