Attacks and gun battles between suspected Islamists and security forces in a northeastern Nigerian town have killed several people and destroyed buildings, residents and authorities said Friday, while unrest also hit another city.

Explosions and gunfire shook the city of Potiskum, sparking panic and chaos, from late Thursday, residents and security forces said. Residents reported several dead as well as schools and a government building burnt.

In the city of Maiduguri, also in the northeast and the base of Islamist extremist group Boko Haram, petrol bombs exploded, leading to fire that burned 11 roadside shops, the military said in a statement. One civilian was also shot dead and four others were wounded, it said.

A Chinese construction worker was shot dead in Maiduguri on Friday, a state official confirmed. It was unclear if the civilian the military spoke of in its statement was referring to him.

Meanwhile, the military announced the arrest of an alleged high-profile member of Boko Haram at the house of a senator in Maiduguri, without providing further details.

Police said they were seeking to restore calm in Potiskum and clear unexploded bombs on Friday.

"There are so many bombs here and there, and I can't give you the casualty figure now, because our men are still in the field to restore calm," said Patrick Egbuniwe, police commissioner for Yobe state, where Potiskum is located, speaking earlier in the day.

A military source said some houses had been destroyed with homemade bombs and a security checkpoint was attacked, but he also could not give a death toll yet. He said Boko Haram was suspected to be behind the violence.

"I cannot ascertain as of now how many people were killed, apart from the one (suspect) that I know who was shot at the checkpoint," the military source told AFP.

Residents of the city, which has been repeatedly hit by Boko Haram, described heavy explosions and gunfire, with Potiskum under military lockdown on Friday morning as security forces sought to track down the attackers.

Soldiers have often responded brutally to attacks in northeastern Nigeria and have been accused of killing civilians and burning homes in the past.

It was however not clear if troops were the cause of any of the destruction in Potiskum, and residents spoke of attackers throwing homemade bombs at houses.

Two residents spoke of seeing a number of bodies, while one said several schools were burnt, including an Islamic seminary.

"From where I stand, I can see the local government secretariat completely burned and several shops around it smouldering from last night's attack," one resident said.

Another said that "at least five primary schools, including an Islamic seminary, have been burnt in the attacks."

Violence linked to Boko Haram's insurgency in northern and central Nigeria, including killings by security forces, is believed to have left more than 2,800 people dead since 2009.

Human Rights Watch said last week that both Nigerian security forces as well as Boko Haram may be guilty of crimes against humanity.

Thursday's violence seemed to have begun with an attack on a security checkpoint, which led to gun battles with the assailants.

Residents said chaos then spread to other parts of the city, with bombs exploding and gunfire echoing through neighbourhoods.

Blasts and gunfire also had rocked the city on Wednesday.

Authorities said then that homemade bombs were thrown at security forces during a search of a suspected Boko Haram hideout, resulting in a gun battle, but gave no indication of casualties.

Northeastern Nigeria has been the region hardest hit by Boko Haram, though its attacks have also spread to other areas of the north and centre.

The group has claimed to be seeking an Islamic state in Nigeria, though its demands have repeatedly shifted. Boko Haram is believed to include a number of factions in addition to imitators and criminal groups who carry out violence under the guise of the group.

Nigeria, Africa's most populous nation and largest oil producer, is divided between a mainly Muslim north and predominately Christian south.