Yemen's third largest city Taiz and its airport have been seized by Shia Houthi rebels, officials say.
Residents took to the streets in protest and one was killed as the rebels fired on them and used tear gas.
Abdrabbuh Mansour Hadi (file photo - June 2013) Photo: AFP
The insurgents already hold the capital, Sanaa, after overthrowing President Abdrabbuh Mansour Hadi in February. He fled to Aden in the south.
Instability has been growing in Yemen, where al-Qaeda and Islamic State sympathisers also pose a threat.
On Saturday, the US said it was withdrawing its troops from the country due to the worsening security situation.
The US evacuated a southern military base seen as key to its use of drones against al-Qaeda militants.
Tanks
Dozens of tanks and military vehicles were reported to be heading from north Yemen towards Taiz, which lies between Sanaa and Aden.
The seizure of the Taiz brings the Houthis to within 140km of President Hadi's new base in Aden - a southern port city.
The UN Security Council is holding an emergency meeting on Yemen's security situation yesterday.
The rebels declared a new government in February and said a transitional five-member presidential council would replace President Hadi.
However, the Houthis are from the north, and their declaration has not been recognised by southern leaders.
On Sunday, Houthi leader Abdel-Malek al-Houthi vowed to pursue Islamists militants from al-Qaeda in the Arabian Peninsula and IS.
Both al-Qaeda and IS are Sunni groups and consider the Shia Muslim Houthis to be heretics.
IS said it was behind the suicide bombings of two Houthi mosques on Friday in Sanaa, which killed 137 worshippers.
Mr Houthi also accused Qatar and Saudi Arabia of "funding all conspiracies in the region" and accused Mr Hadi of "being a puppet in the hands of other actors to implement their agendas in Yemen".
This crisis is deepening fast, says BBC Middle East analyst Alan Johnston, and there's a danger of northern and southern Yemen eventually being torn apart.
-BBC