The clashes left 24 rebel fighters dead, including 12 whose bodies were taken to a hospital in Mokha, medical officials said.
The other 12 were rebels whose remains were found by advancing troops and later buried in the port city, a loyalist military official said.
Eight soldiers were killed, military and medical officials confirmed.
The deaths occurred as forces loyal to President Abedrabbo Mansour Hadi advanced into neighbourhoods of the coastal Mokha city, forcing Houthi rebels to retreat to northern and western parts of the town, military sources said.
Loyalists backed by the firepower of a Saudi-led Arab coalition entered the strategic port town in late January as part of an offensive to drive the rebels away from the Red Sea coast - a key region that overlooks the strategic Bab al-Mandab Strait.
More than 400 combatants have been killed since government forces launched their drive up the Red Sea coastline.
Fighting between Yemeni government forces and Houthi rebels has trapped tens of thousands of civilians in and around the port town of Mokha.
The UN humanitarian coordinator in Yemen, Jamie McGoldrick, said in a statement released Tuesday that he was "extremely concerned about the safety and well-being of civilians" in Mokha and nearby Dhubab.
"Information from the field indicates that military operations in the coastal region have forced most residents of Dhubab to flee the area," he said.
McGoldrick said "an estimated 20,000-30,000 people, almost one third of the population, are trapped in the town (of Mokha) and require immediate protection and relief assistance".
Conflict in Yemen escalated in March 2015 when the Saudi-led coalition launched an air war against the Houthi rebels, who had taken over the capital and seized swathes of the country's centre and north.
The war has cost more than 10,000 lives in the past two years, according to the UN's World Health Organisation.
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