Hundreds of people were seen fleeing their homes as the latest clash came amid growing fears of widespread religious violence in the country between a mainly Muslim north and predominantly Christian south.
According to residents, the gunmen attacked three banks, robbed and burnt the banks, killing a policeman and a civilian.
According to Lawan Tanko, Yobe state police commissioner, “Our men engaged Boko Haram gunmen in shootouts for most of the night, which led to some deaths and injuries. It is too early to give figures because we are still investigating the incident.”
Dozens of Islamists had stormed the town — part of a region where the Federal government declared a state of emergency last week after days of deadly violence.
A resident added that they also threw a bomb into a nearby police barracks but no-one was hurt.
Dozens of people in nearby neighbourhoods fled their homes in fear of military raids in the aftermath of the attack, they said.