In a separate incident overnight in central Kogi state, gunmen using explosives blew their way into a prison in the city of Lokoja, killing one person and freeing 144 inmates, Adams Omale, prisons coordinator for the state, told Reuters.
In the suicide bombing in Potiskum in Yobe state, a territory at the heart of an insurgency by Sunni Muslim Boko Haram rebels, the attacker joined the line of Shi'ites before setting off his device as they marched through a market in the town, resident Yusuf Abdullahi said.
"I heard a very heavy explosion as if it happened in my room. It took place just 200 metres from my house," he said. Another person carrying an explosive that did not go off was arrested, he said.
Mohammed Gana, whose brother was killed in the attack, said he counted 23 bodies at the scene.
Another Potiskum resident, Abubakar Saliu, said soldiers started shooting immediately after the explosion, but it was not clear who they fired at or if anyone was hit by the gunfire.
Ashoura marks the death in battle more than 1,300 years ago of the Prophet Mohammad's grandson Imam Hussein.
Boko Haram's five-year-old campaign for an Islamic state, which has killed thousands, is seen as the main security threat to Nigeria, Africa's biggest economy and leading oil producer.
Omale said 26 of the Lokoja prison inmates freed in the Kogi raid had been recaptured. He did not comment on whether any of the escaped prisoners were Boko Haram members.
QUESTIONS OVER "CEASEFIRE"
Nigeria's government announced last month that a ceasefire had been agreed with Boko Haram and that talks were underway in neighbouring Chad for the release of more than 200 Nigerian schoolgirls abducted in April by the Islamist rebels.
But although mediator Chad has said the negotiations are still on, a spate of recent attacks across Nigeria's northeast by suspected Boko Haram fighters has raised serious doubts about whether a lasting peace pact can be achieved.
Prospects for this took another hit at the end of last week when a man claiming to be Boko Haram leader Abubakar Shekau said in a video recording the kidnapped girls were "married off" to his fighters, contradicting Nigerian government statements that they would soon be freed.
Nigeria's military says it killed Shekau a year ago, and authorities said in September they had killed an impostor posing as him in videos.
President Goodluck Jonathan, who is seeking a second term in elections in February, has faced rising criticism at home and abroad for failing to halt the Boko Haram insurgency and obtain the release of the schoolgirls.
In a statement on Monday, Nigeria's opposition All Progressives Congress (APC) accused Jonathan's government of misleading the public over the reported peace deal.
"The president has failed in his most sacred duty, protecting the safety and wellbeing of Nigeria's citizens," the APC party said.