The blast scattered debris and dead bodies on the Alkali Road in the city center, but missed Sheikh Dahiru Bauchi, who was conducting Muslim prayers in Murtala Muhammed square, two witnesses told Reuters by telephone.
There was no immediate claim of responsibility, but Islamist militant group Boko Haram has been staging attacks, especially with explosives, outside its northeastern heartlands in the past three months.
The group has often attacked Muslim leaders and imams who criticize its hardline Salafist ideology.
Witness Yusuf Suleiman, a trader, said that he counted 15 bodies in a police van after the explosion.
Police were not immediately available for comment.
Boko Haram, which is fighting to carve out an Islamic state in Nigeria, has repeatedly targeted civilians this year, mostly in remote northeastern Borno state. It killed more than 2,000 civilians during the first half of this year, Human Rights Watch (HRW) estimated a week ago.
The Islamists sacked the northeast town of Damboa and surrounding villages over the weekend, killing at least 50 people.
The five-year-old insurgency has been in the international spotlight since Boko Haram fighters kidnapped more than 200 girls from a school in the northeastern village of Chibok on April 14th. President Goodluck Jonathan met parents of the abducted girls for the first time on Tuesday. (Reuters)