Reports of the talks emerged as Boko Haram was blamed for fresh attacks targeting the security forces, public buildings and a school in its northeastern stronghold.
Cameroon also said it had begun deploying 3,000 extra troops to buttress its border with Nigeria against the threat posed by marauding militants.
Yesterday evening, Nigeria's Chief of Defence Staff, Air Chief Marshal Alex Badeh, said the 223 girls still missing had been located but cast doubt on the prospect of any rescue by force.
"The meeting was focused on how to free the girls through negotiation," the source told AFP, referring to the kidnapped schoolgirls, whose abduction has triggered global outrage.
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Nigeria's response to the mass abduction has been widely criticised and the hostage crisis has brought unprecedented international attention to Boko Haram's five-year extremist uprising.
Obasanjo, who left office in 2007, has previously sought to negotiate with the insurgents, including in September 2011 after Boko Haram bombed the United Nations headquarters in Abuja.
The 2011 talks did not help stem the violence and some at the time doubted if Obasanjo was dealing with people with the authority to negotiate a ceasefire.
The former head of state, who remains an influential figure in Nigerian politics, refused to take questions when reached by phone earlier Tuesday.
But the source told AFP that Obasanjo had voiced concern about Nigeria's acceptance of foreign military personnel to help rescue the girls.