Islamist Boko Haram militants have seized control of the northeast Nigerian town of Mubi, killing dozens of people and forcing thousands to flee, witnesses said.
The insurgents stormed Mubi on Wednesday. Gunfire has been heard in the town ever since, witnesses told Reuters.
A security source on Thursday confirmed the town had fallen to the insurgents. Witnesses said they hoisted their black flag over the palace of the traditional ruler.
Witnesses said the insurgents robbed banks, burned down the main market and sacked the palace. One saw them kill a university lecturer and his entire family -- Boko Haram, whose name means Western education is sinful, abhors secular learning.
Violence in Nigeria's northeast has been on the rise since the government announced a ceasefire with the rebels nearly two weeks ago to pursue talks in neighbouring Chad aimed at freeing more than 200 girls kidnapped in April.
The government has blamed criminal networks for the violence, which has undermined public confidence in both the ceasefire and the talks. It has had no immediate comment on the situation in Mubi.
Boko Haram's five-year-old campaign for an Islamic state, which has killed thousands, is seen as the main security threat to Africa's biggest economy and leading oil producer.
Student Stephen Adaji said he had been hiding in the bush since mid-morning on Wednesday when the fighting began until a farmer helped him cross to a nearby village and he fled to the nearest city of Yola.
"We couldn't sleep in the bush because of the fear Boko Haram may get us," he said. "We were so scared, shooting was going on throughout the night and they often shouted Allah Akbar (God is greatest)."
A spokesman for the National Emergency Management Agency (NEMA) in the northeast, Abdul Ibrahim, said the agency had sent extra personnel to help manage people fleeing to Yola, a relatively safe city that is home to the well-guarded American University of Nigeria.
He said an attack just prior on the nearby town of Uba had forced 4,000 people who were in a displaced persons camp to vacate the camp and head for Yola. Several hundred also fled across the border into Cameroon.
"I saw many dead bodies in the bush and many injured people were lying helpless especially children and women," said James Audu, also a student. "They killed a lecturer and his entire family. I saw them get shot."
Another survivor, a mobile phone trader called Abubakar Adamu, said the Emir Isa Ahmadu was away on pilgrimage to Mecca when his palace was looted. Boko Haram scorns traditional Islamic authorities in Nigeria as corrupt and self-serving.