Niamey (AFP) - Boko Haram fighters waged twin attacks Sunday in Niger, their latest front in a widening regional insurgency, with a market bomb blast sowing panic.

The Islamist militants battled Niger soldiers for two and a half hours starting before dawn on Sunday on the edge of the southeastern town of Diffa, witnesses and humanitarian sources said.

A few hours later, a major explosion rocked a central market, but the defence minister dismissed reports that it was the work of a female suicide bomber.

"Shells were fired" from Nigeria, with one falling in central Diffa, said Defence Minister Mahamadou Karidjo, who was in the town at the time.

A health official reached by telephone said earlier that a female suicide bomber blew herself up, killing a child and wounding 20 people.

"The child was working near a food vendor," the source said, requesting anonymity, adding that the injured were receiving treatment.

A local journalist meanwhile attributed the blast to a bomb thrown by a man on a motorcycle.

There was no immediate toll from the fighting Sunday between the Nigeria-based Islamist rebels and the Niger troops, possibly alongside Chadian forces, who have taken a lead role in battling Boko Haram.

But the latest violence came just two days after Boko Haram's first major offensive in Niger, when they met resistance from the Niger army backed by Chadian soldiers.

The Islamist fighters have been massed for months on the Nigerian side of the Komadougou Yobe river forming a small part of the border between the two countries.

- 'Forces of evil' -

Niger announced last week that it would ask its parliament on Monday to approve sending troops to Nigeria to fight the militants alongside Chadian and Cameroon soldiers.

"The defensive position of our forces over the past three months is not a good position," Karidjo told state television. "The boys (soldiers) are chomping at the bit to definitively dismantle" Boko Haram.

He said he was hoping for the parliament's green light to deal a "death blow (to the) forces of evil."

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The incursions into Niger mark an expansion of the violence attributed to Boko Haram, which has waged a six-year insurgency centred in northeastern Nigeria, where the Islamists have seized swathes of territory.

The conflict has killed at least 13,000 people and forced more than a million from their homes since 2009.

The uprising has become a regional crisis, with the four directly affected countries -- Cameroon, Chad, Niger and Nigeria -- agreeing on Saturday along with Benin to muster 8,700 troops, police and civilians in a regional effort against the militants.

Last week Chad launched a cross-border ground assault to battle the jihadists and recapture the Nigerian town of Gamboru after having bombed the area beforehand. Chad's army said it had killed more than 200 Boko Haram fighters in the clashes.

Friday's strikes in Niger targeted Diffa as well as the nearby town of Bosso, with Niamey claiming that 109 Boko Haram fighters were killed as well as four soldiers and a civilian. Niger security forces said 17 of their men were wounded, and two were missing.

Sunday's attacks have plunged the poor Sahel country into fear.

"It's panic everywhere," said a journalist in Diffa, the provincial capital, where tens of thousands of people have fled the Boko Haram violence in Nigeria.

Mounting worries over Boko Haram prompted Nigeria this weekend to postpone key national elections by six weeks, saying security could not be guaranteed for the polls because available military resources were being committed to intensified operations against the rebels.