Yemeni medics and witnesses say an assailant has thrown a grenade into a market in the southern province of Lahij, killing two people.
There was no immediate claim of responsibility for Wednesday's attack in the town of Habilayn. At least 11 people were wounded.
Yemen has been plagued by months of violence connected to an opposition uprising against Yemeni President Ali Abdullah Saleh's 33-year autocratic rule, and an anti-government insurgency by Islamist militants linked to al-Qaida.
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On Tuesday, troops loyal to Mr. Saleh opened fire on protesters in the capital, killing four people and wounding dozens of others. The shootings came as demonstrators marched calling for Mr. Saleh's departure.
On Monday, clashes between pro-Saleh troops and opposition forces in the capital killed at least eight people, and another four were killed Sunday when loyalist troops fired on protesters.
Mr. Saleh has said he will not hand power to long-time rivals from the opposition parties. He said they have hijacked the youth activists' protest that began earlier this year and aim to “destroy the country.”