Last week, the STC gave President Abd-Rabbu Mansour Hadi's government an ultimatum - either dismiss Prime Minister Ahmed bin Daghr and his cabinet or face being overthrown.
The internationally recognised government of Yemen has been fighting for almost three years to regain control of the country after losing the capital Sanaa and much of the north to the Houthi rebels.
Aden has been the government's base since 2014 when Houthi rebels from the North took control of Yemen's capital, Sana'a.
At least 36 people have been killed and 185 wounded due to the violence in Aden since Sunday, according to the International Committee of the Red Cross.
Hadi s government has accused the separatists of attempting a coup in Aden, opening yet another front in the country s devastating conflict.
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Yemen s president has urged Saudi Arabia and its allies to intervene to defend the government.
At least 20 people were killed in the al-Jarrahi district of Hudaydah after a Saudi-led coalition hit three cars outside of a restaurant.
"The Transitional Council now controls the whole city of Aden practically, with the exception of the palace of Al-Maashiq [the presidential palace], which is the 'red line, '" the source said.
Saudi troops who have been guarding the palace for months stopped the separatists at the gate, preventing them from entering.
The Coalition sought joint work with the legitimate Yemeni parties to liberate the country from enemies and avoid any reasons that may lead to division and split, and undermining the State's institutions in Yemen.
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The civil war is further complicated by the presence of al-Qaida and the "Islamic State" (IS) militant group, who are ready to take advantage of any power vacuum.
Separatist fighters in Yemen have reportedly captured the defacto capital, Aden and surrounded the presidential palace.
Yemen's presidency on Monday condemned recent developments in southern Aden province, describing them as "tantamount to a coup".
Hadi, who is based in Saudi Arabia, renewed his call for a cease-fire, saying "rebellion and weapons won't achieve peace or build a state".
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