The video shows a soldier dousing a corpse with liquid while onlookers, one of whom is wearing a South African uniform, record on their mobile phones.
If the state doesn't want the insurgency to turn into a prolonged game of whac-a-mole, it will need to address Cabo Delgado's socio-economic shortcomings.
Palma was taken in a coordinated attack on March 24. Commander Chongo Vidigal, leader of military operations to regain control of Palma, told state television TVM the area was "safe."
UN says so far 5,300 displaced people registered in different districts of northern Cabo Delgado province, home to simmering insurgency linked to Daesh since 2017.
Hundreds of shaken survivors of the March 24 Daesh attack in Palma have streamed into the neighbouring town of Mueda and provincial capital Pemba, where they arrived via boat, foot and plane.
Militants ambushed the town in Cabo Delgado province on Wednesday and have now seized its control after government forces withdrew, security sources say.
With the world distracted, Mozambique is facing a growing humanitarian crisis.
The government says it has intensified operations to combat militants as northern Cabo Delgado province sees a rise in attacks.
UN Secretary-General Antonio Guterres called for a "generous response" from the international community to help Mozambiquans after Cyclone Kenneth and Idai, the worst environmental disasters ever experienced in Africa.
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