Hundreds of people from a town in northeast Nigeria were taken hostage by jihadists linked to the so-called Islamic State group, local and militia sources said on Wednesday.

Head of a local media, Babakura Kolo, said the Islamic State West Africa Province (ISWAP) "terrorists" took over Kukawa in the Lake Chad region late on Tuesday, capturing people who had just returned to their homes after spending nearly two years in displacement camps.

"The terrorists attacked the town in 22 trucks around 4:00 pm (1600GMT) yesterday and engaged soldiers guarding the town in a fierce battle," Kolo said.

Kukawa residents had returned home escorted by the military on August 2 on the orders of the Borno state authorities.

They had been living in camps in the regional capital of Maiduguri where they fled to following a bloody attack in November 2018.

A security source who confirmed the incident to AFP said, "fighter jets were deployed from Maiduguri on Wednesday to 'tackle the situation' without giving details."

Two million people have been forced out of their homes most of them from the north part of Borno by the decade long jihadist conflict.