Nigerian security forces claim to have surrounded the kidnappers of a French family in northeast Borno state in an effort to rescue the hostages.
The Nigerian military located the hostages and kidnappers between Dikwa and Ngala in the far northeast, according to a military source in Borno.
Dikwa is less than 80 km from the border with Cameroon where the three adults and four children were taken hostage on Tuesday.
Nigerian, French and Cameroonian officials have also denied French media reports that the family were freed.
Issa Tchiroma Bakary, Cameroon’s Communications Minister said: “For the moment the information that I am giving you is that it is a crazy rumour and the government has heard this statement. It is simply a crazy rumour, we don’t know where it has come from.”
The abduction is the first case of foreigners being seized in the mostly Muslim north of Cameroon, 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.