Boko Haram has seized control of a Nigerian town after hundreds of soldiers stationed there reportedly fled across the border to Cameroon, a police source said.
"Boko Haram fighters moved into Ashigashya" overnight on Monday, where they slaughtered three people in front of a church, a Cameroon police source told the AFP news agency on Tuesday on condition of anonymity.
Almost 500 Nigerian soldiers fled the Nigerian border towns of Ashigashyia and Kerawa over the weekend to take refuge from Boko Haram fighters on Cameroonian territory.
Nigeria's military dismissed the claims and said the troops were "charging through the borders in a tactical manoeuvre" when they found themselves on Cameroonian soil.
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It said that the soldiers were on their way back to Nigeria after following protocol by handing over "their weapons in order to assure the friendly country that they were not on a hostile mission."
In Maiduguri, the capital of Nigeria's Borno state and where the military joint task force has its headquarters, a junior officer said his colleagues who spoke with him from Cameroon described running out of ammunition and facing well-armed Boko Haram fighters.
The police officer said security was "deteriorating day by day in the border towns".
Ashigashya is bisected by a small river which marks the border between Nigeria and Cameroon.
The police source said Boko Haram was now trying to take the Cameroonian side of the city.
"Cameroonian gendarmes fled the brigade to sleep at school in the city. When they tried to return to the police this morning, they were greeted by fire from Boko Haram" from the Nigerian side, said the police officer.
Nigerian president Goodluck Jonathan declared a state of emergency in three northeastern states in May 2013, saying the fighters had taken over parts of Borno state, Boko Haram's birthplace.
Boko Haram said it controls the northeastern city of Gwoza and has added it to an Islamic state that it claims it has established in Nigeria.
Gwoza, in Borno state, is now part of its "Islamic Caliphate" asserted Boko Haram's leader, Abubakar Shekau, in a video seen on Sunday.
Nigeria's army said on Twitter: "That claim is empty ... the Nigerian state is still intact."