* Seven die in shootout in northern Nigeria's Kano
* Bomb factory explodes in Damaturu, three wounded
* President Jonathan sets up joint patrol with Chad's Deby (Adds bomb factory explosion)
By Mike Oboh
KANO, Dec 19 (Reuters) - Nigerian police have arrested 14 suspected members of an Islamist sect and seized explosives after a gun battle left four militants and three policemen dead in the northern city of Kano over the weekend, the local police commissioner said.
In a separate incident On Monday, a huge blast shook the northern city of Damaturu when a bomb-making factory exploded, wounding three militants, the police commissioner for Yobe state said, underscoring how Islamist militants who used to be confined to northeastern Borno now operate throughout the north.
Last week, daily gun and bomb attacks in various parts of the north killed at least seven people.
Militant group Boko Haram is waging a low level insurgency, which used to be largely confined to Nigeria's remote northeast Borno state, but this year has increasingly plagued other parts of the north and the capital, Abuja.
Describing Saturday's shootout in Kano, police commissioner Ibrahim Idris told journalists late on Sunday:
"One of the suspects, Mohammed Aliyu, noticed that his house was being monitored and mobilized some members of his syndicate. They drove up in three vehicles and attacked the policemen and shot (three) dead," adding that four policemen were wounded.
"Four of the syndicate members were shot dead by the police special anti-robbery squad that responded to the scene."
At the house of a suspected militant where the shootout occurred, police found 50 litres of petrol and five gas canisters, some AK-47s, two pump-action shot guns and 1,125 rounds of ammunition.
Another suspect's house was found to contain detonators, wires, homemade bomb casings and large quantities of explosives, including gun powder and ammonium nitrate.
President Goodluck Jonathan and his Chadian counterpart Idriss Deby met on Monday to discuss shoring up security along their common border, on Lake Chad -- a porous, remote frontier where Boko Haram militants are mostly based.
They agreed to set up a joint border patrol.
A bomb making factory exploded on Monday, Yobe police commissioner Tanko Lawal told Reuters.
"We heard the blast and drafted our officers to scene of the incidenct ... It injured three sect members who were preparing explosives," he said. One was receiving treatment in hospital.
Boko Haram have been blamed for scores of shootings and bombings in the north, including a spate of attacks last week in Kano and their heartland of Maiduguri, capital of Borno state.
Nigerian security forces have been unable to contain the growing threat of Islamist militants in the north, who this year struck the capital twice, including a suicide car bomb against the U.N. headquarters that killed 26 people.
Nigerian authorities raided a bomb making factory in Maiduguri on Saturday. (Additional reporting by Felix Onuah in Abuja and a reporter in Maiduguri; Writing by Tim Cocks Editing by Maria Golovnina)