"Heavy shooting and shelling by suspected Boko Haram fighters were heard all around us and we remained indoors throughout. Later we heard siren by the army and shouts," Musa Bulama, a local resident, told The Anadolu Agency on Saturday.
"This morning, we have counted about 10 and security agents told us many people are injured," he said.
Grace Akanji, another resident, said heavy gunfire was heard in most parts of Damaturu at about 6p.m. on Friday.
"The sound of bomb explosion was immediately followed by sporadic gunshots. We heard the militants came from Babban Gida town where they had reportedly killed some people." she told AA by phone.
Hamid Waziri, a petty trader, said the shooting started along the western axis of Gujba road within the metropolis, same area where the insurgents invaded the town last month.
At least 20 people and about 200 militants were killed when Boko Haram militants attacked Damaturu on December 1.
Waziri said that insurgents were probably on revenge mission.
"We heard Boko Haram had vowed to attack Damaturu again after some hunters and vigilante men burst their camp in a village around the Gujba area early in the week and seized their weapons and arrested some of them," he said.
The latest attack came amid reports of heavy casualties in the fishing town of Baga in neighboring Borno state last week when militants overrun a military base there.
Thousands of people have reportedly fled the town and its environs.The Nigerian government said the military is already "responding" to the Boko Haram offensive in Baga.
Blast in market of Nigeria's Maiduguri kills at least 16, injures 27
In a separate attack, A bomb explosion in a market in the northeastern Nigerian city of Maiduguri on Saturday killed at least 16 people and injured more than 20, a security source and witnesses said.
Maiduguri, the capital of Borno state, is often bombed as it lies in the heartland of an insurgency by Sunni Muslim militants Boko Haram to revive a medieval caliphate in Africa's most populous country, also the continent's biggest energy producer.