The Nigerian army has repelled an attack by suspected Boko Haram militants in the town of Biu in the north-eastern state of Borno.
Some insurgents were killed, the army said after the militants were driven back.
Local people told the BBC they had seen the militants retreat and calm had been restored.
The attack came after three people were killed in a suicide attack in neighbouring Gombe state on Tuesday.
Residents of Biu, the largest town in Borno South, say they woke up to the sounds of heavy explosions and sustained gunfire.
One resident said Boko Haram militants had entered the town firing guns around 06:30 local time (05:30 GMT), leading some residents to flee.
Army spokesman Chris Olukolade says some militants were killed and others captured
Residents who stayed saw the army, which has often been accused of retreating in the face of Boko Haram attacks, engage the militants in intense battle.
Nigerian army spokesman Chris Olukolade said the military had killed some of the insurgents, taking their weapons, and had captured five of them alive.
Another resident of Biu said calm had now been restored and that although shops were still closed, people were venturing out again.
Biu is reported to host large numbers of refugees who have fled towns taken over by Boko Haram.
Borno state, which is in the north-east of the country bordering on Chad and Cameroon, has been at the forefront of Boko Haram attacks in recent months.
The militants have captured a number of cities and are reported to control large parts of the state. Senator Maina Maaji Lawan, who represents Borno North, recently told the BBC at least 70% of the area he represents was in the hands of Boko Haram.
The fighting caps a week of violence with two suspected child suicide bombers in a crowded market on Sunday and an unspecified number of people killed when Boko Haram stormed the town of Baga.
Nigeria is to hold elections next month, amid growing doubts whether they can successfully go ahead in all parts of the country.