UN peacekeepers found the bodies of 16 people in the southern Port-au-Prince quarter of Martissant.
The UN Stabilization Mission in Haiti (MINUSTAH) and the Haitian national police force sent teams to the area in an attempt to control the situation.
"The people who died were civilians, not gang members," said Pierre Esperance, a local human rights activist whose National Coalition for Haitian Rights has monitored gang activity in the area.
The battle began on Thursday evening and continued into Friday, according to Haitian police force spokesman Mario Andresol.
"The police force is aware of the developments and taking measures to control the situation," Andresol said.
Established in 2004 and under Brazilian command, the UN team includes about 7,500 military troops and 2,000 international police.
MINUSTAH was sent to stabilise the Caribbean nation after the former president Jean Bertrand Aristide fled a popular uprising in 2004.
In May a new government was sworn in promising to reduce the violence.