Unidentified assailants shot and seriously wounded a US military instructor in Yemen on Sunday, while the army closed in on a town controlled by al Qaeda-linked fighters in heavy fighting that killed at least 27 people, local officials said.

Four Americans - who were in the impoverished Arab state training its coastguard - were in the car that was attacked, a Yemeni coastguard officer said.

"They were leaving their hotel in a Land Cruiser when militants in another car pulled up alongside and opened fire with rifles. One was shot in the neck and the other received a bullet in his leg."

Another source said only one person was wounded.

Ansar al-Sharia (Partisans of Islamic Law) claimed responsibility for the attack in the Red Sea city of Hudaida. The authenticity of the group's claim, made to Reuters via telephone, could not immediately be verified.

Ansar al-Sharia has exploited more than a year of political instability in Yemen to gain a foothold in a country paralysed for most of 2011 by protests that eventually unseated President Ali Abdullah Saleh.

In the south of the country, where Islamist militants have seized swathes of territory, Yemeni troops closed in on the militant-held town of Jaar, amid intense clashes in which at least 11 Islamist fighters and seven soldiers died, according to residents and local officials.

Residents said militants ambushed troops overnight and managed to hold off an army advance from the west.

On the northern edge of Jaar, a Yemeni air strike targeted a factory used as a base by militants, residents said.

One witness said a vehicle laden with at least nine bodies sped out of the burning building towards the centre of Jaar, which militants have renamed the "emirate of Waqaar".

Spanish guard missing

On Sunday, it emerged that a Spanish embassy guard disappeared while driving to the airport to fly to Spain on holiday last week. "We lost track of him on Thursday," a diplomat told Reuters.

"The only thing we know is that he never took the plane to Madrid. We don't know yet if he was kidnapped - no tribes have contacted us - but obviously it is very disturbing."

Spanish Interior Minister Jorge Fernandez Diaz told Spanish radio he was aware of the disappearance of the 38-year-old but could not give any further details.

Alarmed by the deteriorating security situation last year, the United States backed a power transfer plan that replaced Saleh with his former deputy Abd-Rabbu Mansour Hadi.

Saleh was taken into hospital on Sunday for medical checks, a TV station owned by his party said. It gave no details.

Saleh was wounded in a June assassination attempt that took him to Saudi Arabia and the United States for medical treatment.

Since Hadi took office earlier this year, militants have launched a series of audacious attacks, continuing to exploit disunity in the army that splintered during the uprising into pro- and anti-Saleh camps.

Yemen is home to al Qaeda in the Arabian Peninsula (AQAP), which the United States has described the most dangerous branch of the network.

Saudi intelligence services said earlier this month they had foiled a plot to arm a suicide bomber with an improved version of an underwear bomb of the type that failed to explode on a 2009 U.S.-bound flight.

The US has itself targeted militants in Yemen using drones, which have frequently killed civilians and are deeply resented by Yemenis, even the many who abhor al Qaeda.

As well as a tenacious militancy, Hadi is also grappling with rising secessionist sentiment in the south and a Shi'ite rebellion in the north.-Reuters