The attack on Friday on Wase town in Plateau state comes a day before local council elections across the country.
Major clashes between Muslims and Christians in nearby Yelwa and Gerkawa at the end of February left about 200 people dead and forced more than 6000 to flee.
Mohammed Inuwa, a Wase resident, said he saw several bodies in the town after two vehicles full of Christian attackers invaded in the early hours, burning several houses.
"I counted one, two, three to 28 people who were killed," he said. A state government official, who declined to be named, said there were at least 20 dead.
The deputy inspector of Plateau state police, Sunday Ehindero, said he knew of nine people who died in the local hospital.
"I went to Wase General Hospital where I saw two soldiers killed and two civilians killed. My men gunned down five people who were fighting," he said.
Wase is located 120km south-east of the state capital.
The region has been racked by sectarian violence in recent years, turning many towns and villages into strongholds of one religion or the other.
More than 10,000 people have died in communal violence in Nigeria since 1999 when President Olusegun Obasanjo was first elected, ending 15 years of military rule in Africa's most populous nation.