The dead and injured were suspected drug traffickers, Xinhua news agency quoted the police as saying.
The shootout took place on Monday after Rio police intelligence services were informed that a group of drug traffickers were set to invade the turf of a rival faction in the favela.
According to police, 26 people were arrested after the shootout.
In addition, weapons, including a grenade, a tonne of marijuana and 20 stolen vehicles and motorcycles were seized.
The shootout forced the closure of 35 schools, four healthcare centre and a university campus.
It also paralysed traffic on the Red Line expressway, one of Rio’s main access and exit routes.
–IANS
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