The Islamic State in West Africa (ISWAP) group, a faction of the Boko Haram, claimed responsibility for the attack in which it said 15 soldiers were killed, according to SITE, which tracks the online activities of terrorist organisations.
The incident began when gunmen in several trucks attacked a military base and a local market in the town of Kukawa late on Monday, briefly forcing troops out of the base.
"Our soldiers engaged the terrorists in a fierce battle following the attack," a military officer told AFP from Maiduguri, the regional capital which lies about 180 kilometres (110 miles) to the south.
"So far, 16 soldiers are missing but search teams are combing the general area to locate them," said the officer, speaking on condition of anonymity.
There were no immediate official reports of casualties on either side but a civilian militia group confirmed that 16 soldiers were missing and also said one civilian had been killed in the crossfire.
The attack came hours after Boko Haram jihadists attacked soldiers in Kumshe village near the border with Cameroon.
Last month two Nigerian soldiers were killed when troops on foot patrol stepped on a mine around Kumshe.
Boko Haram has intensified its attacks on military targets in the northeastern states of Borno and Yobe in recent months.
The nine-year jihadist conflict which has spilt into Niger, Cameroon and Chad, has killed 27,000 people and left some 1.8 million homeless in Nigeria alone.
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