Maiduguri, the birthplace of terror group, Boko Haram, is frequently targeted by the Islamist sect.
A hospital source told Reuters a dozen people were brought in with injuries as well as four bodies so far.
AP quotes trader Bukar Shettima saying he saw “nauseating corpses and battered bodies littering the ground” before he ran away.
It comes a day after the Defence Ministry appointed Maj. Gen. Iliyasu Isah Abbah to command an 8,700-strong regional army to curb the Islamic uprising that has spilled across Nigeria’s borders. It has killed some 20,000 people in six years and driven 2million from their homes.