A large explosion on Monday rocked a major Shia ceremony in northeast Nigeria's Yobe state, an area repeatedly attacked by Sunni Islamist group Boko Haram, multiple witnesses said.

The targeted worshippers were gathered outside a seminary in the Tsohuwar Kasuwa area of Potiskum city after visiting the palace of the local emir, said witness Ibrahim Maina and a police officer who requested anonymity.

Maina blamed the explosion on "a bomb" which went off 10 metres (32 feet) from the emir's palace.

"It was a huge crowd and many of them were affected," the policemen told AFP, declining to estimate a death toll. "The priority is to rescue the injured."

Potiskum is the economic capital of Yobe, which is one of three northeastern states under emergency rule since May of last year because of the insurgency.

The area has seen repeated violence, including attacks on the minority Shia community.

In July, four Shias were killed in a bomb attack blamed on Boko Haram at an open-air mosque in the Dogo Tebo area of the the city.