The two men came on motorbikes and sped away after the shock attack, they told AFP on telephone from Maiduguri, capital of northeastern Borno State.
"The attackers, believed to be Boko Haram members, threw bombs and fired indiscriminate gun shots on a packed tavern at Dala Kabompi neighbourhood, killing at least 25 people and seriously injuring around 30 others," a police superintendent said.
|People walk past the main gate of the state police command headquarters in Maiduguri,|
An army captain, also speaking on condition of anonymity, said: "It will be difficult to say with precision the number of casualties but it can't be less then two dozen."
Emmanuel Okon, who sells roast beef on the fringes of the tavern, said: "I just heard a loud bang followed by sporadic shootings and plumes of black smoke filled the area with people screaming and running in all directions.
"The wounded and the dead lay on the ground and the place was littered with broken bottles and glasses and personal effects like shoes," he said.
"I didn't count the number of casualties but I believe those who died are more than 25 and the injured could be more than 30," Okon said.
Nuraini Kanta, a local resident, said he heard a bang followed by a series of gunshots while sitting outside his home, hundreds of metres away.
"I was listening to the radio ... when I heard a loud explosion followed by gushots and dark smoke ... I instinctively rushed indoors because it was clear that Boko Haram had attacked," he stated.
"I later went to the scene after the casualties had been removed where I learnt that more than 25 people were killed in the attack and dozens of others injured," said Kantat.
The attack came on the day a joint military and police task force was launched to combat the spate of bomb and shoot-and-run attacks by sect members in the city.
Borno police chief Mohammed Jinjiri Abubakar had on Thursday issued a statement offering dialogue with the radical Boko Haram sect and urged them to call a truce.
The sect has been behind series of hit-and-run attacks targeting police and military personnel, politicians and community and religious leaders.
It has also in the past months carried out bomb attacks on police stations, churches, bars and staged a prison raid.
The sect claimed responsibility for a May 29 bomb attack on a beer garden in a military barracks in northern Bauchi city that killed 13 people and injured 30 others.
The group has also claimed responsibility for the June 16 bomb attack on police headquarters in the Nigerian capital Abuja that killed at least two, including a policeman, saying their target was the national police chief.
Local media said up to eight people were killed in that blast at the police car park that also wounded several other people and damaged dozens of vehicles.
Boko Haram, whose name means "Western education is sin", launched an uprising in 2009 which was put down by a brutal military assault that left hundreds dead.