The U.S.-backed war in Yemen has strengthened al Qaeda there, American defense officials concede, posing a serious threat to U.S. security.

Months into the U.S.-supported Saudi intervention in Yemen, fighters linked to al Qaeda in the Arabian Peninsula (AQAP), long considered the terror group’s deadliest franchise, are closing on the southern port city of Aden, according to U.S. officials and local reports.

The land grabs marks the most important gains al Qaeda has made since March, when the Saudi military began its intervention into Yemen. And it gives the group more area to train, plot, and attack U.S. interests. As recently as earlier this month, AQAP called for its supporters to hit the United States, urging lone wolf attackers to strike.

“AQAP has been slowly building up capacity,” particularly since the Saudi intervention, said Aaron Zelin, a fellow at the Washington Institute for Near East Affairs who studies jihadi movements. “They are stronger.”

It’s also safer than before. Mixed in with civilian populations, the group becomes harder to attack through the U.S. drone program. And it appears the group is using the conflict there to solidify its hold on Yemen.

“AQAP has insinuated itself among multiple factions on the ground, making itself more difficult to attack” through methods like the U.S. drone program, said Daveed Gartenstein-Ross, a senior fellow at the Washington, D.C.-based Foundation for Defense of Democracies.

Not only is Saudi Arabia failing to stop the group’s expansion, but some fear the kingdom is colluding with AQAP to fight the Houthis, Iranian-backed rebels whom Saudi Arabia considers a bigger threat. Indeed, there have been reports that AQAP and Saudi Arabia worked together in the initial efforts last month to push the Houthis out of Aden.

“It is now clear that AQAP has been a significant beneficiary of the chaos unleashed by the Houthi takeover…The net result is that AQAP continues to make inroads and exploit the situation.”

“It is now clear that AQAP has been a significant beneficiary of the chaos unleashed by the Houthi takeover,” a U.S. counterterrorism official told The Daily Beast. “While the Saudi-led coalition has started to push back the Houthis, they are not able to simultaneously fight AQAP. The net result is that AQAP continues to make inroads and exploit the situation.”

In the last few days, reports have emerged suggesting al Qaeda controls the city’s port, Aden’s commercial center, known as Crater, and Tawahi district, which holds a presidential palace. Just north of the city, in Dar Saad, roughly 200 al Qaeda fighters are training in what was once an army base.

An August 25 report by the private intelligence firm STRATFOR found that “Houthi forces have started to fire rocket artillery from positions removed from the city, indicating that severe opposition is forcing them to adopt maneuvers to stall approaching forces.” And on Tuesday, the International Committee of the Red Cross withdrew its 14 foreign staffers from Aden after masked gunmen, presumably newly arriving al Qaeda fighters, attacked its offices.

AQAP’s capture of Aden could give the group access to new resources and safe havens. It also would represent a major victory as chaos continues to roil Yemen following the ouster of President Abd Rabbuh Mansur Hadi. To many it would be the equivalent of the self-proclaimed Islamic State’s takeover last year of Mosul, Iraq’s second-largest city.

“AQAP will use this territory to devise plots against American targets, both to inspire plots and to initiate them in Yemen,” said Bruce Riedel, a retired CIA official who’s now a senior fellow at the Brookings Institution. “All that being true, a country in the midst of the civil war with [blocked airports and ports] is not the prime space to launch terrorist attacks.”

More immediately, control of Aden’s ports could lead to threats on commercial ships traveling through the Gulf of Aden, Gartenstein-Ross said. The city is already infamous as the site of al Qaeda’s October 2000 suicide attack on the destroyer USS Cole that killed 17 American sailors and injured 39 others.

Until its move on Aden, AQAP’s biggest land grab in the current war was the city of Mukalla. Unlike ISIS, which seeks to hold areas and govern them under what it considers a caliphate, al Qaeda has not formally run any city. Some argue the group currently leading the city, the Sons of Hadramut, which includes some AQAP and tribal elements, is an al Qaeda front group.

“AQAP can look to the lessons learned of other extremist groups to exploit conflicts to advance their agenda,” the U.S. counterterrorism official said. “The locals’ distrust of outsiders, lack of confidence in the government, and resentment of Houthi forces offer AQAP leverage to advance its twisted ideology.”

The U.S. military has helped Saudi Arabia carry out its attacks against the Houthis by providing intelligence, refueling Arab warplanes, and effectively blockading Yemen at times to prevent Iran from resupplying them. But even as warplanes from Saudi Arabia, the United Arab Emirates, Kuwait, and other Gulf militaries pound the Houthis, the Sunni fighters of AQAP are taking advantage of the power vacuum in Yemen to claim more territory and strengthen their operations.

Despite AQAP’s gains, U.S. officials so far have been reluctant to publicly criticize the Saudi intervention in Yemen. The kingdom is, of course, a longtime regional ally, and its reserve and oil supplies set world market prices, which now are relatively low. Riedel notes that the U.S. needs the Saudis’ help to pass the Iran deal.