The attacker blew himself up while riding a motorbike near a vehicle carrying the commander of a battalion of UAE-backed forces, the source told AFP.
The explosion killed a female passerby and a soldier driving the vehicle that was carrying the commander, who was among four wounded passengers, the source said.
Two civilians were also wounded, added the source, who is loyal to Yemen's internationally recognised government.
A doctor in Aden confirmed the toll of two dead and six wounded to AFP.
There was no immediate claim of responsibility for the attack in the southern city.
Nearly 10,000 people have been killed in Yemen's conflict since 2015, when Saudi Arabia, UAE and other countries joined the government's fight against the Iran-backed Huthi rebels.
Yemen-based Al-Qaeda in the Arabian Peninsula has flourished in the chaos of the civil war, especially in the south of the country.
Ten suspected Al-Qaeda jihadists and two soldiers fighting for Yemen's government were killed last week in southern Yemen, in clashes and a drone strike, local officials and security sources said Sunday.
Yemen's multi-faceted conflict has pushed the impoverished country to the brink of famine, triggering what the United Nations says is the world's worst humanitarian crisis.