The attack late on Monday apparently targeted local hunters in Damboa who sell bush meat from animals such as monkeys and pigs, which strict Muslims are forbidden to eat, Alhaji Abba Ahmed said.
He added: "Gunmen suspected to be members of BH [Islamist sect Boko Haram] came to the town market and shot dead 13 local hunters on the spot while five others died from their injuries at the hospital" "
Northern Nigeria has suffered a surge in violence in the past week. Damboa is in the remote north-east, near the borders with Niger, Cameroon and Chad, the sect's heartland.
Boko Haram's members practice a strict Wahhabist version of Islam that sees anyone who disagrees with it as infidels.
Its fighters say they want to carve an Islamic state out of Nigeria, a country split evenly between Christians and Muslims. The insurgency is seen as the top security threat to Africa's leading energy producer.