A homemade bomb planted inside a tent went off shortly before 11:00 am (local time) at the Malkohi internally displaced persons (IDP) camp near the Adamawa state capital, Yola.
"So far seven persons lost their lives and 20 persons were injured in the bomb blast," a spokesman for the National Emergency Management Agency (NEMA), Sani Datti, said in a statement.
"Among the injured, seven were treated and discharged while 13 persons, including four NEMA officials, are still receiving treatment at (the) Federal Medical Centre, Yola."
Adamawa state police spokesman Othman Abubakar initially gave a lower toll of two dead and seven injured, while the Red Cross said three had been killed and nine injured.
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Suleiman Mohammed, director of response, relief and rehabilitation at the Adamawa State Emergency Management Agency (ADSEMA), told AFP five were killed and 20 injured.
The Adamawa state governor, Jibrilla Bindow, was reported as telling a meeting of northern governors that some of the many children at the camp were among the dead.
"None was in direct contact with the explosion but there was flying shrapnel. We dodged the bullet," he said.
Abubakar and Mohammed both said the blast was caused by an IED left by tents in the sprawling camp, which is just outside Yola to the south and near an army base.
Security had been tight after hundreds of women and children held hostage by Boko Haram were brought to the camp after they were rescued by the military earlier this year.
"Our men are there," said Abubakar. "They are trying to find if there are any other explosives."
Yola has been seen as a relative safe haven from the violence and last year its population more than doubled in size to about 400,000 as those made homeless flocked to the city.
Many of the displaced were housed at state-run camps or stayed with relatives and friends.
Nigeria's former vice-president Atiku Abubakar, who founded the AUN and is from Yola, said in a series of tweets that he was "deeply saddened" by the bombing.