What else do you need. It's way past her bedtime she wakes up and sits on the side of the bed and will not go back to sleep, She will change the threat that she is concerned with etc.
Wonder if you tell your Mom that yes there are people outside but they are there to make sure she is safe. Or put on a night light telling her that light will make the people leave. Whether she believes that or not, it would be worth a try.
Have her evaluated for a UTI, or other infection. They often cause hallucinations and delusions in the elderly, esp. women. If not, I'd try the ideas from freqflyer.
I'm not sure how this would work with a middle of the night incident, but I had read this somewhere . Move the person to a different room where "those people won't bother her." The good news with dementia, is the person may then forget the issue , especially if the move calms them.
With all the other sugestions agree with her and tell her you will go outside and tell them to leave. close the drapes if possible and leave a light on in her room.
They often cause hallucinations and delusions in the elderly, esp. women.
If not, I'd try the ideas from freqflyer.