Nigeria's military said Monday it had re-established control in five remote areas of the northeast where Islamist insurgents had seized territory, as it pressed on with a sweeping offensive against Boko Haram militants.

Several thousand troops were last week deployed across three states in the volatile region, and fighter jets have pounded Boko Haram camps as the military tries to rid the country of "terrorist activities."

The military has "secured the environs of New Marte, Hausari, Krenoa, Wulgo and Chikun Ngulalo after destroying all the terrorists' camps," a defence ministry statement said.

All of the areas recaptured in northern Borno state near the Cameroon border were considered Boko Haram strongholds.

President Goodluck Jonathan sent his troops in after declaring a state of emergency in Borno and two neighbouring states of Yobe and Adamawa.

He said Boko Haram -- whose shifting demands include the creation of an Islamic state in Nigeria's mainly Muslim north -- had chased out local officials in some areas and removed the Nigerian flag.

Residents in New Marte and Krenoa have told AFP they were among the areas targeted by military air strikes.

"The troops are already interacting with locals and citizens assuring them of their safety and freedom from the activities of insurgents," the statement added.

The military said that 120 suspected insurgents were arrested while organising the funeral of one of their leaders in Maiduguri, who had "died in an encounter with special forces the previous day."

The arrested suspects are being interrogated by the military, said the statement, adding that troops had also blocked insurgents trying to flee towards neighbouring Chad and Niger.

Sources in Cameroon said thousands of Nigerians fleeing the fighting had crossed the border in recent days.

"Since Nigeria declared the state of emergency, they have been coming here," a Cameroonian security official told AFP on condition of anonymity.

An AFP reporter in the village of Seram, barely a mile from the Nigerian border, saw several hundred Nigerian civilians who had set up camp.

Aly Doukar, a Nigerian driver from the village of Woulgo, said his home was deserted when he returned from work last week.

"When I enquired, I heard the army had been there and fired shots in the air. I was told my family had fled to Cameroon. This is why I am here, I've come to bring them back," he said.

The remote, thinly populated region of northern Nigeria has porous borders where criminal groups and weapons have flowed freely for years, and the army has deployed troops to seal border crossings.

The military on Saturday imposed a round-the-clock curfew in 12 Maiduguri neighbourhoods considered Boko Haram strongholds.

There is a risk of high civilian casualties, with the Nigerian military having been accused of massive rights abuses in the past.

The Boko Haram conflict is estimated to have cost 3,600 lives since 2009, including killings by the security services.

Finance minister Ngozi Okonjo-Iweala on Monday sought to assure the international community that despite current security challenges, the nation's economy, the second largest in Africa, was still strong.

"Economic growth was 6.5% in the first quarter of 2013, inflation is down to single digit, fiscal deficit is only 1.8 of GDP, foreign reserves stand at $48 billion," her office said in a statement.