Egyptian authorities accuse the Hanafi family of using the village, about 400 kilometres south of Cairo, as a haven for criminals and drugs and arms traffickers.
Police also arrested on Saturday a number of Hanafi family members after an exchange of fire.
The police operation began on Wednesday after the murder two weeks ago of five people in a feud between two families that has left at least 20 dead over several years.
At least five officers were injured overnight on Thursday in clashes with village residents. Intermittent exchanges of automatic weapons fire were heard on Saturday on the outskirts of the village, the police said.
Police arrested 15 suspects, including one who was injured while trying to flee, and took control of the areas surrounding the village.
Members of the Hanafi family, who have kept an unknown number of hostages, have threatened to attack the trains in the area.
"Police forces have raided our village and opened fire at us," Yasir Hasan, a Hanafi family member told Aljazeera. "Why do they want to kill us?"
"They have asked us for money but we do not have any," Hasan said. When asked about hostages, Hasan said: "Yes, we have kept hostages to protect ourselves."
He then called for intervention. "We appeal to any side to intervene and save us from this government," he said. "We have no money. This is unjust," he lamented.