The attack by Yemen's Shiite Houthi rebels that killed at least six people shows how the Arab world's poorest country has become one of the world's top battlefields for drones.
At least six people were killed, medical officials said.
The source also added that Lahij Governor Ahmad Abdullah Turki and other military commanders were among those injured in the incident.
Reporters at scene said the Houthis were targeting the Yemen government's army chief of staff.
The parade was taking place inside a military base in the Anad district when a loud explosion rocked the area, witnesses said, adding high-ranked officials, including Yemen's deputy chief of staff, were wounded in the attack.
Yemen plunged into civil war in 2014 when the rebels captured Sanaa, the country's capital. The U.N. humanitarian aid chief on Wednesday accused the rebels of blocking humanitarian supplies travelling from areas under their control to government-held areas.
The rebel group has previously attempted similar drone attacks against Saudi radar stations used to launch Patriot missiles.
Soldiers scrambled to carry wounded comrades to military vehicles
The attack also raised new questions about Iran's alleged role in arming the Houthis with drone and ballistic missile technology, something long denied by Tehran despite researchers and United Nations experts linking the Yemeni rebel weapons to the Islamic Republic.
Houthi media quoted its military describing the drone as a new variant of its Qasef, or "Striker", drone.
He added that drone carried between 70 and 100 kilogrammes of explosives, and was detonated while flying over the main stage of the military parade after an "accurate surveillance of the enemy commanders' movements". The drone, a Qasef-2K, has been created to explode from a height of 20 meters - about 65 feet - in the air and rain shrapnel down on its target, according to the Houthis.
A United Nations panel of experts on Yemen issued a report in 2018 noting that the Houthi's Qasef-1 drone "is virtually identical in design, dimensions and capability to that of the Ababil-T, manufactured by the Iran Aircraft Manufacturing Industries".
For its part, Iran repeatedly has denied supplying the Houthis with drone or ballistic missile technology.
Such drones also remain hard to shoot down with either light or heavy weapons fire.
Qasef drones are launched with pre-programmed co-ordinates to follow, unlike other drones where a pilot flies it via a video link, said Jeremy Binnie, a weapons expert who works as the Middle East and Africa editor at Jane's Defence Weekly. They have received logistical and intelligence support from the US, UK and France.
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