The United States on Thursday said it was concerned by increasing Boko Haram violence and territorial gains in Nigeria, warning that the deteriorating situation threatened the African giant's future.
Boko Haram, which has been waging a violent insurgency that has claimed thousands of lives since 2009, has in recent weeks overrun and held swathes of territory in Nigeria's far northeast.
The militants on Monday reportedly took over Bama, 70 kilometers (45 miles) from the Borno state capital, Maiduguri, where 10,000 youths, former soldiers and police gathered on Thursday vowing to push back the advance.
Multiple testimonies from residents who have been fleeing Bama all week contradicted military claims that soldiers still held the town.
"The truth is that Boko Haram fighters are in firm control of Bama," said one resident, Muhammadu Mai Tumatur, who escaped to Maiduguri.
"The have occupied the military barracks and the palace of the emir and they have hoisted their flags in both places... There is not a single soldier in the town. The gunmen are in control."
U.S. Assistant Secretary of State Linda Thomas-Greenfield said Washington was "very troubled by the apparent capture of Bama and the prospects of an attack on Maiduguri."
And in a thinly veiled reference to Abuja's insistence that Nigerian sovereignty remained intact, she added: "This is a sober reality check for all of us.
"We are past time for denial and pride."
Maiduguri is home to an estimated one million people, but numbers have swollen as residents from elsewhere in Borno have flocked to the city to escape the bloodshed.
More than 700,000 had been internally displaced, with the violence battering an already fragile local economy, hitting food supplies and threatening to disenfranchise voters at next year's elections, Thomas-Greenfield said.
The United Nations said on Tuesday that at least 9,000 Nigerians had fled to Cameroon in the last 10 days alone. Nearly 10,000 escaped to Niger in August, it added on Thursday.
Thomas-Greenfield, who heads Washington's Africa Affairs team, said Boko Haram's claim that the captured Borno town of Gwoza was now part of an Islamic caliphate "only adds to the perception that the security situation is steadily worsening."
"All of these developments are deeply disturbing, and increasingly dangerous with each passing day," she told a bilateral security meeting in Abuja.
Before Bama fell, the militants seized Gamboru Ngala, Buni Yadi in Yobe state and Madagali in Adamawa, with Nigerian troops seemingly unable to match their firepower.
Hundreds of soldiers abandoned their posts, some crossing the border into Cameroon, although the military said they had not fled but were instead conducting "tactical maneuvers."
Experts have warned that Nigeria's government was on the brink of losing control of the northeast and the violence risked spreading across borders with an accompanying humanitarian crisis.
"The reputation of Nigeria's military is at stake. But more importantly, Nigeria's and its children's future is in jeopardy. Failure is not an option," Thomas-Greenfield said.
Bama residents said heavily armed militants were roaming the town and had until now spared civilians.
One of them, Mustapha Tor, said a "large number" of troops were in Kawuri, 20 kilometers away, although they had not mounted a counter-attack.
Most people had left because of previous atrocities, he added.
"We know what they did in Gwoza and Gamboru Ngala, where they told residents they could stay but later turned and killed them," Tor said.
Thomas-Greenfield said Washington would soon announce the launch of a major border security program, which will include Nigeria and its neighbors Cameroon, Chad and Niger.
In Maiduguri, youths, local hunters armed with homemade guns and bows and arrows as well as former soldiers and police, promised to fight the militants and end the insurgency.
The state co-ordinator of the civilian vigilantes, Mallam Abba Aji Kalli, said: "We are optimistic that with our gora (sticks in Hausa) and other local arms, we will raid all terrorist hideouts and kill them when given permission by the federal government."
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