The parade within the southern port city of Aden was targeted by missiles and an armed drone, a Houthi-run TV channel says.
Aden is the seat of Yemen’s internationally recognized authorities.
The rebels say the army parade was a part of preparations by professional-authorities forces for a fresh assault on Houthi-held territory just north of the city.
However, the authorities stated it was a graduation ceremony for newly recruited troopers.
Bodies have been strewn on the ground after the attack and troopers had been seen crying, one witness informed Reuters news agency. A senior commander is believed to have been killed.
“The blast occurred behind the stand where the ceremony was happening,” the witness stated. “A bunch of troopers had been crying over a body believed to be of [a] commander.”
The international medical charity Medecins Sans Frontieres (MSF) says dozens of individuals had been wounded.
The navy camp where the attack happened belongs to a professional-authorities force generally known as the Security Belt.
Earlier on Thursday, a suicide bombing at a police station in Aden killed a minimum of three officers. It isn’t clear if this incident was linked to the attack on the army camp.
Yemen has been destroyed by a conflict that escalated in March 2015, when the Houthi rebels grabbed control of much of the west of the nation and forced President Abdrabbuh Mansour Hadi to flee abroad.