Medics told AFP that 49 people were killed and 70 wounded in Wednesday's attack carried out by a bomber dressed as a woman in the city of Ibb.
An initial toll gave at least 33 dead and dozens wounded.
Yemen has been dogged by instability since an uprising forced longtime strongman Ali Abdullah Saleh from power in 2012, with Huthi rebels and Al-Qaeda seeking to fill the power vacuum.
Among those wounded in Wednesday's attack was Ibb governor Yahya al-Aryani, who was attending the Huthi commemoration of the Prophet Mohammed's birthday, a medic said.
A security source told AFP the bomber had been wearing a woman's black abaya and veil when he detonated his suicide belt.
The United States, allied with Yemen in fighting militants, "strongly condemns" the attack, a State Department spokesman said.