The targeted town of Gomboru Ngala falls in Borno state, home base of the Islamist group which today claimed the shocking kidnap of more than 200 schoolgirls in Chibok, also in Borno.
"They have burnt the market, customs office, police station and almost every shop in the town and killed many people but I can't say how many," said Musa Abba.
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Another resident, Isa Mallum, told AFP the gunmen arrived in huge numbers at roughly 1:30 pm in "armoured tanks and patrol vans all painted in military and police colours."
"The attack forced residents to cross the border into Fotokol in Cameroon. I'm now calling you from Fotokol," he said.
Witness Babagana Goni said locals could not yet tell how many people had been killed because it was not safe to return to Gomboru Ngala to "assess the damage and the carnage."
"There is nobody in the town save Boko Haram men," he told AFP. "Everybody has fled into Cameroon and those that couldn't must have been killed by the gunmen."
Boko Haram's five-year extremist uprising has killed thousands in Nigeria, Africa's most populous country and top economy, but the last several weeks have underscored the major threat the Islamists pose to the country.
Two car bombings in the last three weeks on the outskirts of the capital Abuja and the mass abduction in Chibok have raised doubts about Nigeria's ability to contain the violence.
Amid the continuing Boko Haram unrest, Nigeria is preparing to host a World Economic Forum summit, which opens in Abuja on Wednesday and includes a visit from Chinese Premier Li Keqiang.
Boko Haram leader Abubakar Shekau claimed the kidnapping in a video sent to AFP and threatened to sell the girls as slaves.
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