Human Rights Watch cited accounts from several residents who fled the fighting in southern Abyan province, where Yemeni troops are fighting militants after losing control of the provincial capital, Zinjibar, and another town, Jaar.
In a statement released Saturday, the New York-based group also said the militants in Abyan "may have unlawfully placed civilians at risk by deploying in densely populated areas and engaging in looting and other abuses."
There are concerns Al-Qaeda's branch in Yemen is exploiting the country's turmoil amid a months-long popular uprising seeking the ouster of President Ali Abdullah Saleh. The president has been in Saudi Arabia since June 5, undergoing treatment for injuries sustained in an attack on his presidential compound, but massive daily street protests demanding he relinquish power have continued unabated.
The fighting in Abyan has displaced around 70,000 people who have taken shelter in schools and abandoned homes in the adjoining Aden province, HRW said.
"Civilians are paying the price," said Joe Stork, deputy Mideast director at HRW. "Both sides need to be doing much more to protect civilians from harm."
Stork also urged the government in Sanaa to investigate laws-of-war violations committed by Yemeni forces in Abyan and prosecute those found responsible for violations that amount to war crimes.
HRW said it could not visit Abyan because of the security situation but its statement followed interviews conducted in late June in the port city of Aden with witnesses from Abyan, including some who were wounded.
In one incident described by HRW, government forces in May retaliated after a militant attack by opening fire at a crowd in the central market in Zinjibar, killing six civilians and wounding 35 others.
HRW cited an unnamed witness as saying the troops shot at people "right in front of them as if they were chickens," then chased after fleeing residents, "continuing to shoot them as they tried to escape."
The group also highlighted another incident, when Yemeni warplanes in late June fired at least two missiles at a passenger bus on a highway near Zinjibar, killing six and wounding 12.
The government later said the incident was an accident.
According to a statement on Friday by Yemen's Embassy in the United Sates, at least 70 soldiers and 50 militants have been killed in the fighting in Abyan. More than 300 soldiers and dozens of militants have been wounded, the statement said.
Military sources in Yemen meanwhile said an army officer and two of his troops were killed in an ambush by gunmen near Aden on Saturday. They said the unidentified assailants opened fire with automatic weapons on a jeep outside the town of Daleh. Apart from the military casualties, two civilians were wounded, witnesses said.
