Operatives of the Joint Task Force (JTF) and other security agencies surrounded the area where seven French nationals were held hostage Thursday in a bid to rescue the distressed family believed to be prisoners of Boko Haram.
Reuters quoted a security source as saying that the Nigerian military had located the hostages and kidnappers between Dikwa and Ngala in Borno State.
French, Nigerian and Camerounian officials had earlier denied French media reports that the family, comprising a married couple, four children and an uncle, who were seized in Cameroun and taken across the border, had been freed.
Dikwa is less than 80 kilometres from the border with Cameroun where the French family was taken hostage on Tuesday.
So far, Camerounian military officials have avoided making further statement about the incident.
Citing a Cameroun army officer, the French media reported earlier Thursday that the hostages had been found alive in a house in northern Nigeria.
"This is a crazy rumour that we cannot confirm. We do not know where it is coming from," Cameroun Communications Minister Issa Tchiroma Bakary told Reuters by telephone from the capital Yaounde.
"What is certain is that the French tourists who were abducted are no longer on our territory. However, we are in touch with the government of Nigeria to intensify measures to continue the search for them along our common border," he said.
French gendarmes backed by special forces arrived in northern Cameroun on Wednesday to help locate the family, a local governor and French defence ministry official said.
Spokesman for the JTF, Lt. Colonel Sagir Musa, earlier also said the report on France's BFM television of the hostages being released was "not true," while Didier Le Bret, the head of the French foreign ministry's crisis centre, said the information was "baseless."
French President Francois Hollande said yesterday that the family was probably being held in two groups, as security forces searched along the border in Nigeria where they are believed to have been taken.
"We are fully cooperating with Nigerian and Cameroonian authorities to find the location where our citizens are being held," Hollande told reporters.
"For the moment the best thing is to work with some discretion, to first of all identify the exact place where our citizens are being held, probably in two groups, and how we would be able to free them under the best conditions," he said.
He also noted that the French army has forces stationed "not far," in Chad, but made no further comment.
The abduction was the first case of foreigners being seized in the mostly Muslim north of Cameroun, a former French colony.
But the region - like others in West and North Africa with porous borders - is considered within the operational sphere of Boko Haram and fellow Nigerian Islamist militants Ansaru.
On Sunday, seven foreigners were snatched from the compound of Lebanese construction company Setraco in northern Nigeria's Bauchi State, for which Ansaru claimed responsibility.
Northern Nigeria is increasingly afflicted by attacks and kidnappings by Islamist militants. Ansaru, which rose to prominence only in recent months, has claimed the abduction in December of a French national who is still missing.
Three foreigners were also killed in two failed rescue attempts last year after being kidnapped in northern Nigeria and Ansaru, blamed for those kidnaps, warned this could happen again.
The group also claimed responsibility for the attack last year on a police detention facility in Abuja.
The threat to French nationals in the region has grown since France deployed thousands of troops to Mali to oust al Qaeda-linked Islamists who controlled the country's north.
The kidnapping in Cameroun brought to 15 the number of French citizens being held in West Africa.
In a related development, the police said Thursday in Abuja that they had dislodged a terrorist cell in Minna, Niger State, the News Agency of Nigeria (NAN) reported.
Mr. Suleiman Abba, the Assistant Inspector General of Police in charge of Zone 7 Command, told newsmen after releasing cheque of various sums of money to families of deceased officers in the zone. Abba said that members of the cell had been arrested.
The AIG, who did not say when the gang was dislodged, said security in the zone comprising FCT, Niger and Kaduna, had relatively improved following measures taken by the various commands.
"A cell of terrorists was to operate in Mina but we were able to get them arrested before they could carry out their heinous activities," he said.
He added that various weapons were recovered from the gang.
Speaking after releasing the cheque to the beneficiaries, Abba urged them to use the money well by investing it in profitable ventures.
He also urged them to be wary of fraudsters, adding that they should always seek assistance from the police whenever the need arises.
Families of 33 deceased officers, including four serving policemen, who sustained various degrees of injuries, benefited from the insurance scheme. Some beneficiaries received N350,000 while others got N500,000.
Meanwhile, barely 24 hours after some suspected terrorists detonated an improvised explosive device (IED) targeted at a JTF patrol vehicle at the popular Post Office Roundabout in Maiduguri, the Borno State capital, which claimed the lives of the bomber and a woman with her child, another IED still targeted at a JTF patrol vehicle exploded at the Customs area of the troubled city Thursday.
The terrorists, who were stationed on the Main Gamboru-Customs Road, threw the IED at a JTF patrol vehicle which injured the occupants and damaged the patrol vehicle.
The incident, which took place at about 2 pm led to the sporadic exchange of gunfire between members of Boko Haram and the JTF operatives, a situation which led to the killing of three innocent civilians, some shops, buildings and a private fuel station were also razed by fire in the process.