Suspected members of the Boko Haram sect struck at Dalori internally displaced persons (IDP) camp in Maiduguri, capital of Borno state, on Thursday night.
A witness revealed that the attack took place around 9pm.
The witness said suicide bombers first struck before gunmen opened fire from different directions.
The source said the IDPs fled when the gunshots from the Boko Haram subsided and that security operatives have cordoned off the camp.
The incident was said to have caused tension at the University of Maiduguri which is a few kilometers from the scene of the attack.
Many parents reportedly rushed to the school to pick their children while student also fled the institution.
Dalori camp had been attacked by insurgents in the past.