The explosions hit Af-Urur, 100 km (60 miles) south of the city of Bossaso. Af-Urur is near the Galgala hills, an area controlled by al Shabaab Islamists who have attacked and captured the town several times and in June killed 38 people there.
"A bomb planted near the khat market of Af-Urur exploded," Major Mohamed Ismail, a Puntland military officer, told Reuters. "So far 12 people including civilians and soldiers have died."
The attack coincided with Eid al-Adha, a Muslim holiday.
Al Shabaab, which is linked to al Qaeda and wants to impose strict Islamic law, claimed responsibility.
"We are behind the attack in Af-Urur village. We killed five soldiers and injured 10 others," al Shabaab's military operations spokesman Sheikh Abdiasis Abu Musab told Reuters.
(Additional reporting by Feisal Omar in Mogadishu; Writing by Abdi Sheikh and Maggie Fick; Editing by Andrew Roche)
