Celestina Olulode BBC News
Islamist militants launched a deadly ambush on Nigerian soldiers who were travelling on Tuesday on a key highway that re-opened in January after being closed last year because of frequent attacks.
Thirty-five soldiers are reported to have been killed in the attack, which took place approximately 40km (25 miles) from Maiduguri, the main city in north-eastern Borno state.
The death toll is yet to be confirmed but the military has acknowledged it took place in the village of Bulabulin, on the road between Maiduguri and Damboa.
The army, which often downplays its losses, said in a statement that only two soldiers had been killed as well as 17 militants.
The Islamic State West Africa Province (Iswap), a Boko Haram faction, said it was behind the attack, saying 40 soldiers were killed.
The splinter group has carried out a number of devastating attacks this year, killing 81 people in the village of Gubio in June, as well as striking the garrison town of Monguno.
Militant Islamist group Boko Haram and its offshoots have waged a brutal insurgency in Nigeria since 2009.