* Explosive hidden in van carrying charcoal, military says
* Troops hold businessman over schoolgirls' abduction
* Boko Haram militants blamed for relentless attacks
* Capital Abuja has been bombed three times
By Lanre Ola
MAIDUGURI, Nigeria, July 1 (Reuters) - A bomb in a van carrying charcoal exploded in a busy market in northeast Nigeria on Tuesday, killing at least 20 people in the latest suspected attack by Islamist militants, witnesses said.
The blast from the vehicle bomb wrecked cars and taxis that were unloading passengers and wares on a road adjoining the market in the Borno state capital of Maiduguri.
No one immediately claimed responsibility for the blast. But in recent months, the Islamist group Boko Haram has embarrassed President Goodluck Jonathan's government with a spate of bombings and spectacular raids, mostly in northeast Nigeria, including the mid-April abduction of more than 200 schoolgirls.
The military said earlier on Tuesday that it had arrested a number of suspected Boko Haram collaborators including a Maiduguri businessman it said was involved in the abduction of the schoolgirls.
Boko Haram has also struck at Abuja, the capital of Africa's biggest economy, with three bombings in three months.
Nigeria's defence headquarters said in a statement on its Twitter account that "a van loaded with charcoal and IED exploded" in Maiduguri's Monday Market on Tuesday. IED means an improvised explosive device.
Musa Sumail, a local human rights activist in Maiduguri who reports on the violence there, told Reuters he counted 20 bodies at the scene of the market explosion.
"Many people died, mostly drivers of taxis that were packed near the roundabout," a witness, trader Modu Ba'ana, said.
A separate explosion at a busy intersection in the north Nigerian city of Kaduna on Tuesday evening around 8:30 p.m. (1930 GMT) wounded two people but caused no deaths, police said.
The city lies along Nigeria's "Middle Belt," where its largely Christian south and Muslim north meet, and it has been targeted by Boko Haram in the past.
Nigeria's military said in a statement that the businessman it had arrested had helped the Islamist militant group plan several attacks, including the killing of a traditional ruler, the Emir of Gwoza.
Two women were also arrested, one of whom was accused of coordinating payments to other "operatives".
A year-old military offensive against Boko Haram has so far failed to crush the rebels, despite recent assistance in training, intelligence and surveillance from the United States and other Western allies of Jonathan's government.
Boko Haram says it wants to establish an Islamist state in Africa's top oil producer, and the insurgency has killed thousands since 2009, destabilising much of the northeast.
The April abduction of 276 school girls from Chibok in Borno State - 219 of whom remain in captivity - has become a symbol of the government's powerlessness to protect civilians.
Defence spokesman Major-General Chris Olukolade said in the statement the arrested man used his membership of a pro-government vigilante group "as a cover, while remaining an active terrorist".
"His main role in the group is to spy and gather information for the terrorists," he added.
Olukolade said the man had coordinated several deadly attacks in Maiduguri since 2011, including on customs and military locations as well as planting improvised bombs.
Violence has been relentless in northeast Nigeria in particular, with hundreds killed in the past two months, but its economic impact has been limited because most of the unrest is in Nigeria's poorest, least productive region.
Finance Minister Ngozi Okonjo-Iweala said on Tuesday that Boko Haram would knock half a percentage point off the country's economic growth like last year, but investors had not been put off.
On Sunday, the Chibok community was attacked again in three places. Militants opened fire on churches and homes, killing dozens and burning houses to the ground.
The militants are extending their reach beyond their remote northeastern heartlands. A bomb in an upmarket shopping district of the capital Abuja killed 21 people last week, the third attack on the capital in three months.
Boko Haram's reliance on local sources of financing, such as ransoms from kidnapping, robberies and looting, and their use of human couriers to move cash has made the group's sources of funding difficult to track and choke off.
(Additional reporting by Isaac Abrak and Garba Muhammed in Kaduna and Stephen Brown in Berlin; Writing by Tim Cocks and Pascal Fletcher; Editing by Hugh Lawson and Cynthia Osterman)