* Residents still fearful despite army advances
* Boko Haram trying to set up Islamic state
* More than 1,000 killed since Buhari elected
By Ulf Laessing
MUBI, Nigeria, Nov 3 (Reuters) - Life seems to be returning to normal in this northern Nigerian town a year after the army expelled the Islamist fighters of Boko Haram -- shops bustle with customers and vendors hawk their wares in the pot-holed streets.
President Muhammadu Buhari has vowed to crush Boko Haram by December and the army has recaptured much of the territory the jihadists seized in their six-year-old campaign to carve out an Islamic state in Nigeria’s remote northeast.
But a recent surge of suicide bombings and hit-and-run attacks makes residents doubt there is any end in sight to an insurgency that has killed thousands and displaced 2.1 million. Boko Haram has killed more than 1,000 people since Buhari was elected in May on a promise to crush the group.
“We are afraid that they might come back,” said Abubakar Idi, 60, a farmer who fled with his two wives and 16 children when Boko Haram captured Mubi in October last year.
“Anybody who has seen such a terrible thing must be afraid,” he said, sitting in front of his single-storey house and recalling how Boko Haram fighters fired volleys of gunshots at random as they took over the town.
The insurgency is the biggest security challenge facing Africa’s top oil producer, already grappling with a severe economic crisis due to a plunge in oil revenues.
Like thousands of other residents, Idi returned to Mubi, which lies close to the border with Cameroon, when the army started a counter-offensive which has accelerated in recent months.
Signs of fighting can still be seen, despite the buzz in the main market. Banks remain closed having been robbed by Boko Haram, while electricity is almost non-existent.
Schools have reopened in the town but many are still shut in the countryside as the jihadists burned the buildings and killed the teachers. Boko Haram, whose name means Western education is sinful, abhors secular learning.
Diplomats say the army’s performance has improved since Buhari took office pledging to “fix” Nigeria’s legendary corruption and mismanagement.
The former military ruler has appointed a new army leadership and moved its anti-Boko Haram command centre to Borno state, where the jihadists started their revolt.
Residents say Buhari’s anti-corruption drive has had an effect as army commanders are now less inclined to steal resources intended for the security forces, though it remains to be seen how long this trend will last.
Better cooperation with neighbouring Chad has helped the Nigerian government to regain several villages, although a long-planned regional cross-border force is still not operational.
Residents say the soldiers no longer run away when Boko Haram arrive in their pickup trucks. “The difference is that back then if there was a report of an attack we all ran with the security men,” said 55-year-old Mohamed Joda, who makes a living repairing bicycles in Mubi.
“But now they respond to reports of an attack proactively,” he said. “The level of security is better than what it was.”
Boko Haram, which never responds to the media except to deliver jihadist videos to local journalists, is trying to set up a state based on Islamic law. In March it pledged allegiance to Islamic State, which controls much of Syria and Iraq.
The army is securing Mubi and the main road to the Adamawa state capital Yola, 200 km (120 miles) to the south, with patrols, tanks and checkpoints. Every 10 km (6 miles) motorists must wait until called forward by a soldier asking where they plan to go.
But in rural areas the army is spread more thinly, allowing Boko Haram to move around at will. Villagers living along the Mubi-Yola road stay close to their houses for fear of the jihadists.
“I can no longer go hunting because I might run into them in the forest and get killed, so we have to resort to farming,” said Murtala Maxwell, who lives in Gombi village south of Mubi.
He still stays close to home “so in case we see them coming, we can quickly get together and defend ourselves or run for safety”, he said while playing a board game with two friends.
A security expert said the army is getting help from South African mercenaries to navigate in the vast Sambisa forest, Boko Haram’s main hideout in the northeast.
Army brigade commander Victor Ezugwu said the military had cut off the forest, last week rescuing more than 300 people from villages that had been held by Boko Haram.
“We are trying to meet the December deadline given by our president,” he said. “We have cordoned off the entire forest.”
Human rights activists have long accused the army of committing abuses such as looting, fuelling an insurgency in a poor region where many complain of neglect.
This time Ezugwu makes an effort to talk to a group of rescued women, who applauded when he came to a camp in Mubi where they were receiving vaccinations. Three village elders shook hands with the commander.
“Boko Haram took over our village, they wanted to kill us, burn us,” said Bukar Manipo, one of those rescued. “Soldiers heard what they were doing to us so they came to our village. They were shooting, some fell and died, some were shot, others ran into the forest.”
But the commander warned the women that the enemy might strike again as suicide bombers. In September, a bomb attack blamed on Boko Haram killed around seven people in a camp for displaced people in Yola.
“If you see any people who do not belong to your community report them immediately to us,” Ezugwu told the crowd.
Officials want to close the camps in Adamawa state by December when Buhari’s campaign is supposed to end but many inhabitants fear going home.
“Some youths who left a few weeks ago to resettle back in our village were killed when Boko Haram attacked the village again,” said Laraba James, a woman in a Yola camp. (Additional reporting by Isaac Abrak; Editing by Giles Elgood)