Car explosion rocks Yemen's Aden-based Ministry of Finance

A fierce car bomb rocked Yemen’s Aden-based Ministry of Finance early on Wednesday, residents confirmed.

The explosion, which was heard across the coastal city, caused considerable damage to the building in the Khormaksar district of the temporary capital.

"The explosion targeted the ministry building in Khormaksar," one resident told The New Arab.

"During the day time, the area is very busy as there is a Qat market and vegetable stalls but many homeless people sleep there overnight," she added.

"My family and I were awoken by the explosion, it was very fierce - very scary."

Surrounding residential buildings caught fire during the attack, local reports said.  

No group has yet claimed responsibility for the attack and casualties remain unknown.

Earlier this month, twin Islamic State group attacks brought an abrupt end to a period of relative calm in Aden, where the Saudi-backed Hadi government has been based since being driven out of the capital Sanaa by Houthi rebels in 2014.

IS and its extremist rival al-Qaeda in the Arabian Peninsular [AQAP] have taken advantage of the war between Yemen's Saudi-backed government and the country's Houthi rebels, who are allied with Iran, to bolster their presence across much of the south.

In recent weeks, Yemeni forces allied with a Saudi-led coalition have closed in on AQAP strongholds and driven them out of pockets of the southern provinces of Abyan and Shabwa.

The United States, which considers AQAP the most dangerous branch of al-Qaeda, also regularly conducts drone strikes on southern Yemen. 

IS has not claimed a Yemen attack in almost one year. The group claimed responsibility for a December 18, 2016 attack in Aden that killed 48 and wounded 84 soldiers who had lined up to get their salaries.

Yemen's conflict escalated in 2015 when a Saudi-led coalition launched a military intervention aimed at rolling back Houthi gains and restoring Hadi to power. 

The fighting has caused a humanitarian catastrophe which the UN says is the world's worst, pushing seven million people to the brink of famine and sparking a cholera outbreak that the World Health Organisation says has killed 2,000 people.

More than 10,000 civilians have been killed in the conflict and thousands more have been injured.

Yemen is today split in two, with the Houthi-Saleh camp controlling the north and coalition-backed pro-government forces in the south.