(http://news.bbcimg.co.uk/media/images/75725000/jpg/_75725978_nigeriachibok4640414.jpg) A suspected suicide bomber carried out the blast, Reuters news agency reports.
Cars and taxis, which were unloading passengers and goods, were wrecked, it says.
"I saw police and troops picking out victims," said Alakija Olatunde, a student who rushed to the scene.
On Monday night, Nigeria's military said it had raided a Boko Haram intelligence unit thought to be linked to the abduction of the schoolgirls in April from Chibok town, also in the north-eastern Borno state.
The cell leader Babuji Ya'ari was arrested, a military statement said.
Mr Ya'ari had been actively involved in the seizure of the girls as well as the killing in May of a traditional leader, the emir of Gwoza, the statement added.
Mr Ya'ari has not yet commented on the allegations.
More than 2,000 people have been killed this year in attacks blamed on Boko Haram militants.
(http://news.bbcimg.co.uk/media/images/74982000/jpg/_74982323_line976.jpg) Who are Boko Haram? (http://news.bbcimg.co.uk/media/images/75329000/jpg/_75329065_75007899.jpg) Boko Haram leader Abubakar Shekau has been designated a terrorist by the US government
- Founded in 2002
- Initially focused on opposing Western education - Boko Haram means "Western education is forbidden" in the Hausa language
- Launched military operations in 2009 to create Islamic state
- Thousands killed, mostly in north-eastern Nigeria - also attacked police and UN headquarters in capital, Abuja
- Some three million people affected
- Declared terrorist group by US in 2013
Source: BBC