The Yemeni port city of Mukalla, controlled by al-Qaeda militants for a year, has been recaptured by Yemeni and Saudi-led coalition forces.
The coalition says 800 militants were killed in the first hours of a joint operation across the south of Yemen.
But Mukalla residents said there had been little fighting in the city, with the militants apparently withdrawing.
Al-Qaeda's local offshoot has taken advantage of Yemen's civil war to seize territory, weapons and money.
Over the past 13 months, pro-government and coalition forces have focused on battling Houthi rebels and military units loyal to former President Ali Abdullah Saleh.
More than 6,400 people, half of them civilians, have been killed in the conflict, while almost 2.8 million others have been displaced, according to the UN.
On Monday, the coalition command announced that the Yemeni army and Saudi and UAE special forces had launched an operation against al-Qaeda in the Arabian Peninsula (AQAP), the official Saudi Press Agency reported.
They aimed to clear cities and towns controlled by AQAP, the most of important of which was Mukalla, and bring them under the government's control, it said.
The operation "resulted in its first hours in the killing of more than 800 elements of al-Qaeda and a number of their leaders and that the rest of them fled", SPA added.
Residents and local officials said about 2,000 Yemeni and Emirati troops had advanced into Mukalla on Sunday, swiftly taking control of its seaport, oil terminal and airport, and setting up checkpoints.
AQAP militants initially asked people to support them as they confronted "the invaders", but by nightfall they had quietly withdrawn from the city, the New York Times reported.
A local security official told the Wall Street Journal the militants had decided to pull out of Mukalla and flee westwards towards Shabwa province following mediation by Muslim clerics.
Mukalla, which is home to as many as 500,000 people, was AQAP's stronghold in Yemen and some 1,000 militants were based there.
Earlier this month, the Reuters news agency cited two senior Yemeni security officials as saying that when AQAP captured the city last April it seized $100m (£69m) from the local branch of the central bank.
Over the next year, the jihadist group reportedly extorted a further $1.4m from the national oil company and earned up to $2m a day by imposing customs duties on goods coming into Mukalla's port and smuggling fuel.
A tribal leader and two senior officials told Reuters AQAP had even sought permission from the government to export oil in October and collect a share of the profits. However, the government rejected the deal, they said.
AQAP and the rival jihadist group, Islamic State, are excluded from the ceasefire between the government and Houthi movement that took effect on 10 April and paved the way for UN-brokered peace talks in Kuwait.
The US considers AQAP as one of the deadliest offshoots of the jihadist network founded by Osama Bin Laden. The group attempted to bomb a US-bound airliner in 2009 and said it was behind the attack on the offices of the magazine Charlie Hebdo in Paris last year that left 12 people dead.