The target of the attack was Muhammad Abali, the top Muslim traditional leader in Yobe state, where Potiskum is located, and whose official title is the Emir of Fika.
Five people, including three policemen, were wounded in the blast outside the main mosque after Friday prayers ended in the town of Potiskum, the state police commissioner, Patrick Egbuniwe, told AFP.
"A lone suicide bomber attempted to attack the Emir of Fika in Potiskum just after the Friday prayer as he left the mosque. But the attacker was restrained by the people around and he blew himself up," he said.
"Only the bomber died. Five other people were injured including three policemen attached to the Emir," Egbuniwe said.
A nurse at the Potiskum government hospital, who demanded anonymity, said 13 people, including three policemen, were brought to the hospital wounded.
It was the latest such attack targeting Muslim leaders in northern Nigeria, where radical Islamist group Boko Haram accuses establishment Islamic figures of being too close to the country's corrupt elite.
"A man who looked in his 40s ... approached the emir and tried to embrace him, but people around pushed him away, and at that moment, a bomb concealed under his caftan went off," one witness said.
Those wounded included the emir's bodyguard, a mosque aid worker and a nurse, the witness said.
There was no immediate claim of responsibility, though Potiskum has been hard hit by violence blamed on Boko Haram.
"I and my brother were leaving the mosque through a different gate when I heard an explosion followed by a commotion as worshippers tried to flee," another resident said.
"I fled the mosque, but some minutes later when the news of what happened spread, I came back to the mosque and I saw a large crowd watching the dismembered body of the attacker."
Some three weeks ago, a suicide bomber tried to assassinate another key Islamic leader outside his mosque after Friday prayers but missed his target and killed five others.
The target of that attack was Umar Garbai el-Kanemi, who carries the title of Shehu of northeastern Borno state, where Boko Haram has been based. Yobe state borders Borno.
On Wednesday, Boko Haram claimed suicide blasts at two police posts in the country's northwest and a separate attack at a home belonging to Vice President Namadi Sambo.
Twin bombings on Monday in the city of Sokoto, the historic seat of Islam in the country, killed two people and wounded 30 others. The bombers also died in the blasts.
Gunmen had fired on Sambo's home in the northern town of Zaria on Monday. One civilian was killed in the assault.
No one lives at the house, which is undergoing repairs to damage inflicted during post-election riots in 2011.
Boko Haram has killed hundreds in an insurgency that has been focused in Nigeria's mainly Muslim north, with attacks also occurring in the country's religiously and ethnically divided centre.
The country, Africa's most populous nation and largest oil producer, is roughly divided between a mainly Muslim north and predominantly Christian south.
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@A S:
Sir, please refer the Banu Qurayza
Boko Haram sect especially their leaders should be brave and courageous enough to list their grieviances in order of importance including what they demand of government and the people before peace could be restored back in Nigeria instead of wasting people's life and the futures of their children. STOP these bloodshed for God sate.
Did the early Muslims use bombs for the spread Islam? If they ever did there will be no Islam anywhere today. They did not even go on the orgy of chopping off heads and hands, something we see very much associated with so called Islamic regimes. Does anyone who casts his stone, or a bullet or a bomb, searches his soul? If they ever did, there will hardly be anyone left qualified enough to cast his stone. Here is what Allah has said. "If I decided to make people accountable today, not one soul will survive on this earth". The early Muslims spread Islam through their exemplary behaviour and impeccable character. For the establishment of Islamic system the most vital pre-requisite is the existence of enough Muslims around. True Muslims as were those early Muslims. When they were just a few hundred in number, the early Muslims had no trouble creating the Islamic regime or indeed the "Authority of Allah". Today there are millions claiming to be Muslims, yet not one Islamic regime? What is the reason? Those early Muslims were indeed Muslims and we? Amal main Nasaarah to tamuddoon may Hanood. Hum woh loague hain jinhayn daykh kay shermaayay Yahood.