About 20 Nigerian soldiers were feared killed on Tuesday and nearly 1,000 civilians displaced, as gunmen suspected to be Boko Haram in a fresh wave of violence, attacked Monguno, Borno State.
Civilians and military sources claimed the terrorists entered the town in a convoy, disguised as Nigerian soldiers.
They then attacked troops already inside the town, destroying at least 750 homes in the process.
A resident, Gumati Saidu, said people fled into the bush for safety during the fighting and that at least three civilians were killed by stray bullets.
Neither Boko Haram nor the Islamic State for West Africa Province (ISWAP) have claimed responsibility for the latest attack.