The leader of Nigeria's Islamist group Boko Haram said his fighters were now ruling the captured northeastern town of Gwoza "by Islamic law", in the first video to state a territorial claim in more than five years of violent insurrection.
The Nigerian military denied Boko Haram had taken control of the town during fighting over the past week, although security sources and some witnesses said police and military there had been pushed out.
Abubakar Shekau's forces have killed thousands since launching an uprising in 2009, and are seen as the biggest security threat to the continent's leading energy producer.
The militant leader's often rambling videoed speeches have become a regular feature of his bid to project himself as public enemy number one in Africa's biggest economy.
In the latest one released late on Sunday, the militant who says he is fighting to create an Islamic state in religiously-mixed Nigeria, said his forces had taken control of the hilly border town of Gwoza, near the frontier with Cameroon.
"Allah has granted us success in Gwoza because we have risen to do Allah's work," Shekau says, reading out a statement off a notebook, with two masked gunmen on each side of him and three four-wheel-drive vehicles behind him in thinly forested bush.
"Allah commands us to rule Gwoza by Islamic law. In fact, he commands us to rule the rest of the world, not only Nigeria, and now we have started."
Nigerian authorities did not immediately respond to a request for comment. Local newspaper ThisDay quoted Major-General Chris Olukolade as saying the claim Boko Haram controls Gwoza was "false and empty".
"KILL WITHOUT PITY"
The video includes footage of what appeared to be an attack on Gwoza, showing fighters, backed by armored personal carriers, pick-up trucks with attached machine guns, and one tank-like vehicle with track wheels and a large gun.
They unload salvos of gunfire all over the town from trucks and on foot. The fighters are all armed with AK-47s or rocket propelled grenades, some in military uniform, others in civilian clothes. Many of them walk casually as they take over the town.
They also fire into the hills at what appear to be fleeing security forces and civilians, and they help themselves to weapons and ammunition seized from security forces. It ends with scenes of executing captives in pre-dug mass graves, some of them beaten to death with spades.
Witnesses said Gwoza remained a battleground but that Nigerian forces had largely fled. A security source also confirmed that the insurgents were still laying siege to it.
Resident Hannatu John escaped the town during the attack, running into the hills as the rebels fired at them, fleeing eventually to the capital of Borno state, Maiduguri.
She has heard nothing of her father or sisters in the town since early last week, she told Reuters in Maiduguri.
"We are in the dark and full of despair," she said. "Nobody knows what will happen tomorrow."
Police spokesman Emmanuel Ojukwu said on Sunday that 35 policemen were missing after an attack on a mobile police training camp in Gwoza.
Shekau also taunts France, Israel and the United States in the video.
"Democracy is worse than homosexuality, worse than sleeping with your mother," Shekau says. "You are all pagans and we will kill you, even if you do not attack us we will kill you ... Allah commands us to kill without pity."
Islamist groups across the world have become increasingly bold in making territorial claims in recent months. Sunni group Islamic State has declared a "caliphate" across large areas of Syria and neighboring Iraq while an affiliate of al Qaeda said in July it aimed to set up an emirate in east Yemen, local media reported.
Shekau makes no mention of Islamic State in the video, although he does mention Iraq in the context of U.S. intervention there.
In separate violence, at least 13 people were killed in a communal clash between rival Fulani and Jikun ethnic groups in Wukari town, Adamawa state, also in the northeast, police spokesman Joseph Kwaji said by telephone.
