Maiduguri -Boko Haram have seized a strategic town in Nigeria's far northeast, prompting denials from the military, as experts said the government risked losing control and the region was "on the brink" of takeover.
Residents in Bama and a local lawmaker said some 400 troops, some of them without weapons or boots, fled after a military jet mistakenly bombarded the town's barracks during intense fighting.
Nigeria's military countered that it had pushed back the militants, who in recent weeks have moved from indiscriminate and retaliatory hit-and-run attacks to seizing strategic territory in Borno state.
Last week, militant fighters, blamed for killing thousands since 2009, overran the border town of Gamboru Ngala and previously seized Gwoza and declared it part of an Islamic caliphate.
Some analysts have predicted that by seizing territory, Boko Haram is seeking to encircle the state capital, Maiduguri, 70 kilometres (45 miles) away to make it the centre of a hardline Islamic state.
"Nigeria is losing control of large parts of the northeast region," said Andrew Noakes, of the Nigeria Security Network of experts in a report that warned of potential knock-on effects.
"If Borno falls to Boko Haram, parts of (neighbouring) Yobe and Adamawa (states) can be expected to follow. Parts of Cameroon along the border area would also probably be overrun.
"Unless swift action is taken, Nigeria could be facing a rapid takeover of a large area of its territory reminiscent of ISIS's lightning advances in Iraq.
"Such a takeover would likely be accompanied by a major humanitarian crisis, involving the movement of possibly tens or even hundreds of thousands of internally displaced persons."- Aerial bombardment -
In Bama, Nigeria's military seemed to have the upper hand when Boko Haram fighters launched a pre-dawn raid on Monday, with troops deployed to the town before an apparent bid to recapture Gwoza.
But local resident Yasir Zarami said that changed when the military jet bombarded its own troops in an account back by Borno senator Ahmed Zanna in an interview on BBC radio's Hausa language service.
"The jet could not distinguish between soldiers and Boko Haram and bombarded the military barracks which was at the time under the control of soldiers," he told AFP.
"The aerial bombing destroyed the military barracks and forced soldiers to flee towards Maiduguri along with thousands of civilians."
University of Maiduguri student, Aliyu Dawud said he saw troops arriving in the city.
"Some of them had no boots, some had only vests on them while others had no guns. From their looks they were on the run for their lives."
"Bama is now in the hands of Boko Haram because not a single soldier remains there," added another Bama resident, Umar Dahiru.- 'Interminable insurgency' -
Also read:Army upbeat at war against Borno insurgents
Nigeria's military said on its Twitter account @DefenceInfoNG on Monday evening that it had pushed back the insurgents and added: "The claim concerning the Airforce isn't true."
Top brass followed up on Tuesday with another tweet, which stated simply: "#Victory."
But the Bama raid -- and reports of fresh fighting 130km north of Bama in Monguno, where there is a large military base -- again raised questions about Nigeria's ability to tackle the insurgency.
Some Nigerian soldiers stationed in Maiduguri recently refused to deploy to Gwoza in an apparent mutiny, claiming they lacked the weapons to tackle the better-armed insurgents.
Civilians have borne the brunt of the fighting and the UN refugee agency said on Tuesday that at least 9,000 Nigerians had fled to Cameroon and more than 2,000 to Niger in the past 10 days.
"The total number of Nigerian refugees in Cameroon now stands at some 39,000, according to local authorities," UNHCR spokesman Adrian Edwards told reporters in Geneva.
"Niger is already hosting more than 50,000 forcibly displaced from Nigeria who have arrived in the country since May 2013; 1,500 have found refuge in Chad."
In Nigeria 645,000 have been displaced in Borno, Adamawa and Yobe states, Edwards added.
In a paper for the Chatham House international affairs thinktank, Marc-Antoine Perouse de Montclos said Nigeria's military faced fighting "an interminable insurgency" unless its strategy changed.
Military force should combine with police, judicial and local government reform as well as social and economic development to win hearts and minds in the troubled, impoverished region, he added.
But greater, direct military involvement from foreign powers, including neighbouring countries, "could incite the movement to open another front", the researcher said.
Also read: Gani predicted Boko Haram insurgency