Witnesses said the attackers first hurled a grenade and then began to fire into the crowd, killing a dozen people and injuring 18 others in the town, about 220 km from Guwahati.
Assam Police chief Mukesh Sahay told IANS that security forces shot dead one of the attackers. He said four terrorists were on the run and an AK-56 rifle and grenades had been recovered from the spot.
Sahay said he suspected the National Democratic Front of Bodoland (Songbijit) was behind the attack.
Home Minister Rajnath Singh said in New Delhi that he spoke on the telephone to Assam Chief Minister Sarbananda Sonowal and that the central government was closely monitoring the situation.
Minister of State for Home Affairs Kiren Rijiju said the government was "very sad" to hear about killings.
"We have to ascertain who exactly are behind this dastardly attack," he said.
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