"About 10 men opened fire on the tea shop with automatic rifles, killing three Thai-Muslims and injuring a fourth," said Internal Security Operations Command spokesman Pramote Promin.
The three victims were all retired village headmen. The attack occurred at 8:55 am in the Rana district, about 800 kilometres south of Bangkok.
"We had intelligence that the insurgents were going to attack teachers and soldiers, but we didn't expect them to attack villagers," Promin said.
Yala is one of three southern provinces that have suffered in continuing violence since 2004 that has resulted in at least 5,300 deaths.
Preliminary peace negotiations between the government of the mostly Buddhist nation and insurgents seeking autonomy for the Muslim-majority southern provinces appear to have stalled.