Terrorists killed thirty-five civilians, most of them women, on Tuesday in one of the deadliest attacks in Burkina Faso's history.
The attack in the northern city of Arbinda also resulted in the deaths of members of the country's army who killed 80 terrorists in their counterattack, the government said in a statement.
The government declared 48 hours of national mourning in Burkina Faso.
President Roch Kaboré, who has often been reproached for not taking more action against terrorist groups, said on Twitter that the attack had been "barbarian".
"The heroic action of our soldiers allowed them to neutralise 80 terrorists and to recover important military equipment," Kaboré wrote in a statement.
The army chief of staff said that a large number of terrorists had attacked the military and civilian population of Arbinda on Tuesday morning.
There have recently been a number of attacks in the region and in neighbouring countries. In November, 38 people from a mining company died in a terrorist attack on their convoy in the east of the country.
Since 2015, terrorist attacks in Burkina Faso have resulted in over 700 deaths, according to a tally by AFP, and about 560,000 displaced people and refugees, according to the United Nations.
In a statement posted on Christmas morning, Kabore wrote: "on this day of Christmas, have a pious thought for families mourning due to terrorist attacks against our country and be in communion with our brave soldiers who fight with heroism to assure the security of our national territory."