Explosions and gunfirehave been reported on the outskirts of Maiduguri in Nigeria, near a military barracks outside the city.
Soldiers began engaging the fighters in a shootout near the main Giwa Military Barracks and it appeared the fighters were trying to hit the military in their stronghold.
"The sound of heavy gunfire and what sounds like RPGs (rocket propelled grenades) began at around 7:15 AM (6:15 GMT) and it is still going," a witness told the Reuters news agency.
The fighting was happening at Fori, an area near a military barracks, he said.
The army has detained hundreds suspected of belonging to the Boko Haram movement in Giwa barracks.The barracks is the headquarters of a 10-month-old security forces offensive to suppress the Boko Haram uprising in northeast Nigeria using state of emergency powers.
There is also a retirement settlement in the area.
The military cut cell phone service Wednesday in Maiduguri, as part of a renewed offensive, so there was no way to contact officials, the AP news agency reported.
It is not yet confirmed who is behind the attack, but several weeks ago suspected Boko Haram fighters warned area residents that they would attack.
Boko Haram is the biggest security threat in Africa's top oil exporter. More than 2,000 people have been killed in violence over the last six months, security sources say.
President Goodluck Jonathan intensified the military campaign almost a year ago to oust Boko Haram fighters from their stronghold in the poor and undeveloped northeast but it has failed to stem the bloodshed.
Violence in recent months has mostly been confined to rural regions where Boko Haram often gains the upper hand against the military. An attack on the northeast's biggest city where there is a heavy army presence would be a setback for Jonathan.
A series of military press releases have been issued in the past two weeks following unprecedented criticism of the failure to halt deadly attacks that have killed more than 500 people this year, including assaults in which soldiers are reported to have abandoned checkpoints.
Jonathan has responded by firing his entire military command last month and appointing a new defense minister last week.
A statement Thursday from the security forces's Joint Security Information Committee "noted with great concern the orchestrated attack on the morale of the Nigerian security forces engaged in the fight against terrorism by a section of the political elite" and accused them of encouraging a mutiny in the army.