Eighteen soldiers and 48 Al-Qaeda-linked militants have died in the military operation launched early Monday in the Al-Qaeda stronghold of Manaseh, in Bayda province of central Yemen, according to tribal sources and military officials.
Tribal mediators aim to secure the release of two Finns and an Austrian snatched from central Sanaa in December and who authorities believe are being held in Manaseh, the sources said.
A ceasefire came into effect late on Wednesday following mediation by tribal chiefs, the sources said, adding the army was demanding that all foreign Al-Qaeda fighters leave Manaseh.
Local sources said a number of civilians have also been killed in army shelling of the area but without giving figures.
The army has been hunting two brothers of Tarek al-Dahab -- an Al-Qaeda leader killed in a February 2012 attack. They are suspected of holding the European hostages and have so far refused to surrender despite mediation efforts.
The Austrian man and Finnish man and woman were abducted in Sanaa on December 21 as they prepared to travel to the southern port of Aden via Yemen's second city Taez.
Earlier this month, Yemeni security officials had said the Europeans were being held by Al-Qaeda-linked tribesmen in the eastern Marib province.
Most kidnappings of foreigners are carried out by members of the country's powerful tribes who use them as bargaining chips in disputes with the central government.
Hundreds of people have been abducted in Yemen over the past 15 years. Almost all have been freed unharmed.
Al-Qaeda militants, active in the south and east of Yemen, rarely carry out kidnappings. But a Saudi diplomat, Abdallah al-Khalidi, has remained in the hands of the militant network since his abduction in Aden on March 28.
In other unrest, a soldier and three pro-government militia members were killed in clashes on Thursday with Al-Qaeda-linked gunmen in the southern province of Abyan, local leader Hussein al-Weheshi said.
The clashes broke out as army forces aided by the Popular Resistance Committees attacked Maraqesha, east of the city of Shaqra, he said, adding the offensive would continue until Al-Qaeda militants in the city are "eliminated".
Abyan was an Al-Qaeda stronghold before the army and militia launched a major offensive in May driving militants out of major towns in the province.