Boko Haram extremists have killed more than 100 people and hoisted their black and white flag over a north-eastern town left undefended by Nigeria's military, according to a civil defence spokesman and a human rights advocate.
Hundreds of people in another north-eastern area, Askira Uba, are fleeing after receiving letters from the Boko Haram threatening to attack and take over their villages, Abbas Gava, a spokesman for the Nigerian Vigilante Group said.
"Nine major villages are on the run," he said.
Survivors said on Saturday that the insurgents had attacked the town of Damboa before dawn on Friday, firing rocket-propelled grenades, throwing homemade bombs into homes and gunning down people as they tried to escape the ensuing fires. Most of the town had burned down, they said.
A human rights advocate said Boko Haram had struck again as people were trying to bury their dead, and that the toll was probably much higher than 100. He spoke on condition of anonymity because he is not authorised to speak to reporters.
The only defence came from vigilantes armed with clubs and homemade rifles, Gava said.
The town had been under siege for two weeks, since Boko Haram dislodged soldiers from a new tank battalion camp on its outskirts.
The defence ministry claimed to have repelled the attack and killed at least 50 insurgents for the loss of six soldiers, including the commanding officer, but locals said many soldiers had been killed and that the military had been driven from the base. They said in the past week the extremists have twice ambushed military convoys trying to reach the base.
The militants cut off access to the town on Monday, when they blew up a bridge to the south of it. Damboa is on the main road south from Maiduguri, the Borno state capital, and at a strategic crossroads for farmers bringing their produce to market.
Hundreds of thousands of farmers have been driven from their land by the five-year-old insurgency, and officials have been warning of imminent food shortages.
Boko Haram has attracted international condemnation for the abduction of more than 200 schoolgirls who have been held in captivity for three months.
The insurgents have increased the number and ferocity of their attacks this year, particularly in their north-eastern stronghold, and they also have detonated bombs as far away as Lagos, the commercial capital in the south-west.
Human Rights Watch published a report this week which said Boko Haram had killed more than 2,000 civilians in an estimated 95 attacks during the first half of 2014. That compares with an estimated 3,600 people killed in the first four years of the insurgency.
Boko Haram wants to enforce an Islamic state in Nigeria, though half the country's population of 170 million is Christian.