Buni Yadi, the headquarters of Gujba local government area of Yobe state is under attack by suspected Boko Haram insurgents.
Heavy gunshots were heard from eastern and western fringes of the town on Sunday, a development that plunged residents into panic.
The suspected insurgents were said to have entered the town in a convoy of four trucks.
Details of the latest attack are still sketchy.
Buni Yadi is about 45 km away from Damaturu, the Yobe state capital.
The attack is coming less than 24 hours to a presidential rally scheduled for tomorrow, Monday in Damaturu.