"The victims were part of a 14-member military convoy in Shibam town of Hadramout province that was attacked late Friday," the official told Xinhua.
"The militants cut off the heads of all the captured soldiers," he said. The bodies of the 14 soldiers has been recovered, the official said.
Witnesses near the scene said that "some of them were killed by shooting, but most of them were executed after their capture."
On Thursday, Yemeni army soldiers killed seven Al Qaeda militants in a checkpoint near the headquarters of the 1st Regional Military Command in Hadramout after an exchange of gunfire with several attackers.
Since April the Yemeni government has waged a wide-scale offensive on Al Qaeda strongholds in the country's southern territories, killing scores of militants.
The Al Qaeda in the Arabian Peninsula (AQAP) based in Yemen also known locally as Ansar al-Sharia, emerged in January 2009 and is considered one of the greatest threats to the Yemeni government and neighbouring Saudi Arabia.