The government has claimed to have killed 300 al Qaeda members so far this year. That's an indication of how small al Qaeda is in Yemen (a thousand or so members). Most of the firepower in the south is in the hands of individual tribesmen. Most people belong to tribes, and adult males tend to own a firearm of some sort. The recent offensive has caused several hundred casualties. The fighting in Yemen tends to be low-level (lots of rifle and machine-gun fire) and small scale (small groups of troops and gunmen.) But the army does have warplanes and artillery, and both are used regularly. American UAVs are now seen daily, and will occasionally fire missiles to hit terrorists that have been identified and located.
President Saleh, who has still not returned from the Saudi hospital he went to after the June 3rd rocket attack on the presidential palace that severely wounded him. Saleh is losing a growing amount of diplomatic support from major nations (especially the United States). But Saleh continues to maintain control of the government. The tribes, and many Saleh supporters, want Saleh to step down, and allow the powerful personalities and groups that dominate Yemeni society, reshuffle the people running things.
July 22, 2011: After five months, there are still large anti-government demonstrations every Friday. Nationwide, several hundred thousand people turned out today. In the capital (where many government employees owe their jobs to president Saleh), there was a pro-government demonstration. Increasingly, over the last month, the Friday demos have been about the fuel shortages. The main cause of this is the interruption of oil flow (caused by a bomb that broke a pipeline, carrying half the national production, in March). That shut down exports, and the refinery in Aden that supplies most of the nations vehicle, cooking, water pump and generator fuel. Thus there are water shortages, which has a serious impact on everyone, all the time. The oil pipeline cannot be repaired because a powerful tribal chief controls the territory around the break, and will not allow repair crews in until the government makes amends for the death of the chief's son last year. The government has threatened to send in troops to guard the repair crews. But then the army would have to devote thousands of troops to protect the pipeline from further attacks by enraged tribesmen.
July 20, 2011: The army claims to have killed al Qaeda leaders Ayedh al Shabwani and Awad Mohammed al Shabwani during a battle in Abyan province. Al Qaeda later denied that the two men were dead, but neither has come forth to confirm that.
In the southern city of Aden, a British surveyor died when his booby-trapped car exploded.
July 19, 2011: A violent clash in the capital left six dead, the first such deaths since president Saleh left for a Saudi hospital on June 3rd. This fighting was between armed civilian supporters of president Saleh, and anti-Saleh demonstrators.
July 17, 2011: Fighting in Abyan province included an effort to clear tribal and al Qaeda roadblocks that had left the main camp of the 25th mechanized brigade cut off from most supply for the last few weeks.
July 16, 2011: The army (along with tribal allies and logistical support from the United States) has begun an offensive against al Qaeda and rebellious tribesmen in the south. The towns of Mudiah and Shuqrah were quickly cleared, and heavy fighting was heard throughout towns and cities in Abyan province.
In the capital, some protestors tried to establish a rival government, in the form of a council. But this group could not obtain much widespread support, and most of the prominent individuals nominated for seats on the council, declined.
July 15, 2011: Groups of gunmen in trucks and cars drove though the southern cities of Huta and Aden, firing on soldiers and police, and then driving away (often after taking some return fire.)
The UAE (United Arab Emirates) has pledged to ship three million barrels of oil to Aden, to help relieve the fuel shortage. But while the refinery in Aden can turn this oil into fuel, there is still a problem distributing. Roads throughout the south are blocked by checkpoints set up by al Qaeda and, mostly, rebel tribesmen.