The UN sources said the militia fighters opened fire on Pakistani peacekeepers hunting those responsible for attacks on civilians, wounding two of them and triggering a bout of heavy fighting involving helicopters.
"While on operation we were fired upon, so we immediately responded," said Colonel Dominique Demange, spokesman for the UN forces in the Democratic Republic of Congo (DRC).
Demange said the United Nations used an attack helicopter in the operation against the militia. He said 50 to 60 militia members had been confirmed dead.
"This is sending a strong signal to these militias that we are serious," Demange added.
The clash happened at Loga, near where the Bangladeshi peacekeepers were killed in an ambush last Friday.
Loga is 30km outside Bunia, the main town in the Ituri region, one of the worst trouble spots in the DRC.
"I can confirm 50 Congolese militiamen were killed," said Rachel Eklou, a UN spokeswoman in Bunia.
The clash was one of the biggest involving the UN force in the DRC, where militiamen roam vast swathes of the lawless east of Africa's third-biggest country.
The operation involved more than 200 peacekeepers, two transport helicopters and armoured vehicles, said UN spokeswoman Eliane Nabaa.
"This group continues to loot, kill and rape these people, making life miserable. It's time to put an end to this militia"
Eliane Nabaa, UN spokeswoman
Two peacekeepers were wounded in the barrage of gunfire and evacuated to South Africa, said Nabaa.
"This group continues to loot, kill and rape these people, making life miserable," she said, adding: "It's time to put an end to this militia."
Hundreds of peacekeepers were dispatched to several areas of the isolated, scenic territory to provide shelter, food and medicine.
However, following the slaying of the Bangladeshi UN soldiers, the United Nations announced it was suspending humanitarian assistance to 54,000 people due to increased violence.
More to come
A UN military source said the dead were members of the Nationalist and Integrationist Front (FNI) militia, whose leader has been arrested in connection with the peacekeeper killings.
"At least 50 FNI were killed. This was a big operation, but there's more to come," the source said.
The Bangladeshi deaths were the
worst loss in a UN peace mission
The FNI is an ethnic Lendu-dominated militia that has been battling rival Hema factions in a conflict that has killed more than 50,000 people in northeastern Congo since 1999.
Fighting this year between the militia foes has forced 70,000 people to flee their homes. The UN has deployed nearly a third of its 16,000 peacekeepers in Ituri.
FNI leader Floribert Ndjabu was arrested in the capital, Kinshasa, but has not been charged, a government spokesman said on Tuesday.
The slaying of the Bangladeshi soldiers was the worst single loss suffered by the United Nations' peace mission since it began in the former Zaire, now called the DRC, in 1999.