Security forces poured into Maiduguri earlier in the week
Nigerian security forces have stormed a mosque where militants from an Islamic sect blamed for days of deadly violence have been hiding out.
Reports say scores of fighters were killed in the assault, which came after a third night of gun battles in the northern city of Maiduguri.
Many of the militants have now fled, attacking police stations on their way.
The group, known as Boko Haram, wants to overthrow the government and impose a strict version of Islamic law.
Reports from the city on Thursday said the fighting had stopped and the streets were quiet.
The assault by the security forces came after 1,000 extra soldiers were drafted into the city.
Army commander Major General Saleh Maina told the Associated Press that the deputy leader of the sect was killed in the bombardment.
But he said Mohammed Yusuf, leader of the group also known as "Taliban", escaped along with about 300 followers.
An AP reporter who watched the storming of the mosque on Wednesday night and counted about 50 bodies inside the building and another 50 in the courtyard.
Army spokesman Chris Olukolade told the BBC's Network Africa programme that law and order had now been restored in Maiduguri.
"The enclave of the people causing the problem has been brought under better control and in a short while we believe that everyone will be able to go about his normal duties in that area," he said.
The government eased curfew restrictions overnight, allowing people in the city more time on the streets in the evening.
The BBC's Caroline Duffield, in Nigeria, says the state governor has warned that anyone harbouring members of Boko Haram will be dealt with harshly.
But allegations are emerging that the security forces have killed innocent civilians and opened fire indiscriminately as they tackled the militants.
One eyewitness told the BBC he had seen three young men shot dead at close range while they were kneeling on the floor with their arms in the air.
The military strenuously denies claims it has caused civilian casualties.
'All necessary action'
The latest deaths would mean about 300 people have been killed in four days of clashes since an estimated 1,000 militants began attacking police stations and government buildings in several cities in northern Nigeria.
President Umaru Yar'Adua has ordered Nigeria's national security agencies to take all necessary action to contain and repel attacks by the extremists.
Security forces flooded into Maiduguri and began shelling Mr Yusuf's compound on Tuesday, after militants had attacked the city's police headquarters.
The violence broke out in Bauchi State on Sunday, before spreading to the states of Borno, particularly the state capital Maiduguri, Kano and Yobe.
Sharia law is in place across northern Nigeria, but there is no history of al-Qaeda-linked violence in the country.
The country's 150 million people are split almost equally between Muslims in the north and Christians in the south.
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