(Corrects number of soldiers, militiamen killed in third paragraph)
ADEN, Feb 2 (Reuters) - Yemeni government forces have driven a group of Islamist insurgents linked to al Qaeda from their mountain retreat in the country's south after killing 21 militants during two days of fighting, a military source said on Saturday.
The army and pro-government militias battled militants on Thursday and Saturday near the town of Shuqra in Abyan province, an impoverished, rugged region of southern Yemen where tribal law holds sway and armed Islamists have a strong presence.
Five soldiers and two militia members were also killed, the source said. Surviving militants fled the area, he added.
Tackling lawlessness in Yemen, which lies near important oil shipment routes and flanks the world's biggest oil exporter Saudi Arabia, is an international priority.
Washington and other Western governments regard Yemen-based al Qaeda in the Arabian Peninsula (AQAP) as one of the most dangerous branches of the militant network. It has planned attacks on international targets including airliners and pledges to topple Saudi Arabia's ruling family.
Yemen's military and tribal militias ousted an Islamist group called Ansar al-Sharia, which is affiliated with AQAP, from the towns of Jaar and Zinjibar in Abyan province last year. The militants had imposed sharia law in the towns and raised al Qaeda flags.
On Thursday the army and militias launched an attack on remnants of the Ansar al-Sharia holed up in caves in the area, killing two militants.
Yemen, the poorest Arab state, was thrown into political disarray in early 2011 when mass protests against long-time ruler Ali Abdullah Saleh prompted fighting in the capital Sanaa and splits in the military.
Saleh was forced from power a year ago but the transitional government still faces an insurgency by Shi'ite Muslims in the north, the battle with Sunni Islamists in southern areas and a southern secession movement. (Reporting by Mohammed Mukhashaf; Writing by Angus McDowall in Riyadh; Editing by Jon Hemming)