Nigeria's militant Islamist group Boko Haram has captured the town of Banki, which borders Cameroon, after government troops fled, residents say.
The military has not yet commented on the latest town to reportedly fall to the insurgents in recent weeks.
Fears have been raised that their main target is Maiduguri, the capital of north-eastern Borno state.
Boko Haram's "lightning territorial gains" could lead to Nigeria breaking up like Iraq, a think-thank has warned.
Last month, Boko Haram leader declared an Islamic caliphate in areas under the group's control, following a similar declaration by the Islamic State (IS) group, previously known by the acronym Isis, after it captured parts of Iraq and Syria.
"Unless swift action is taken, Nigeria could be facing a rapid takeover of a large area of its territory reminiscent of Isis's lightning advances in Iraq," the Nigeria Security Network (NSN) said in a special report released on Tuesday entitled North-East Nigeria On The Brink.
"If Maiduguri falls, it will be a symbolic and strategic victory unparalleled so far in the conflict," it said.
"A successful attack could be followed by a take over of the whole of Borno state and possibly parts of Adamawa, Yobe, and neighbouring Cameroon."
The UN refugee agency has said the fighting has forced more than 10,000 people to flee to neighbouring Cameroon and Niger in the past week, the Associated Press news agency reports.
Meanwhile, regional foreign ministers have held talks in Nigeria's capital, Abuja, to discuss the growing security threat.
Nigeria, Cameroon, Chad, Benin and Niger agreed to step up security co-operation, including intelligence-gathering, to defeat the militants, a statement issued after the meeting said.
'Hiding in bush'
Residents from Banki say that government troops abandoned their posts as the militants advanced on the small border town on Tuesday.
Most of the people remaining in the town were women and children, as many of the men had fled, one man who was hiding in the bush nearby told the BBC Hausa service.
The militants have not harmed anyone in the town, residents said.
The capture of Banki gives Boko Haram leverage as it tries to secure territory beyond north-eastern Nigeria, says BBC Nigeria analyst Jimeh Saleh.
Earlier this week, Boko Haram seized Bama, the biggest town in Borno after Maiduguri, which is about 70km (45 miles) away.
Meanwhile, Cameroon's army has said that militants crossed into Cameroonian territory on Monday night.
The militants were pushed back after a three-hour battle, it said in a statement.
About 40 militants were killed and an army corporal was seriously wounded in the fighting, it added.
Boko Haram's five-year insurgency has intensified in recent months despite the deployment of thousands of extra troops to the worst-affected areas.
The military has denied that Nigeria's territorial integrity is threatened.
But Nigerian soldiers say they do not have enough resources to curb the insurgency.
In April, the militants captured more than 200 girls from a boarding school in the town of Chibok, also in Borno state.
Countries such as China, France, the UK and US have sent military assistance to help find the girls but they have not yet been rescued.
BBC
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