They said a huge blast erupted at around midday (1100 GMT) in the crowded market in Gombi in Adamawa state, one of the worst-hit in the seven-year Boko Haram insurgency.
The blast came after three suicide bombers killed at least 14 people in town of Chibok on Wednesday, where Islamist gunmen kidnapped more than 200 girls in April 2014.
Nigeria's President Muhammadu Buhari last month declared that the Islamic State group affiliate had been "technically" defeated but there has been no let-up in suicide and bomb attacks.
"Many of us rushed to the scene and we found carnage. People were scattered everywhere.
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"I can say over 10 people died in the explosion. I can't give precise number of the injured but there are many."
Gombi, which lies about 120 kilometres (75 miles) from the state capital, Yola, has been hit several times by Boko Haram attacks, with the most recent taking place in March 2015.
Adamu Ahmad, a security guard at the market, gave a similar account to Jalo, saying the bomber was believed to be a boy aged around 12.
"The attack was believed to have been carried out by a boy of around 12. Today is market day in Gombi and the market attracts thousands of people from the district."
Following the blast, the market closed down and all the traders returned home, he added.
Boko Haram, which is looking to establish a hardline Islamic state in mainly Muslim northern Nigeria, has killed at least 17,000 people since its campaign began in 2009.
A counter-insurgency begun last year by the Nigerian military, supported by troops from surrounding nations, has succeeded in recapturing swathes of territory lost to the militants in 2014.