At least one man has been killed after clashes between troops and crowds erupted in the northeastern in the Central African Republic town of Bambari.
Witnesses and hospital staff said the violence broke out on Thursday when the French peacekeeping troops tried to disarm a Seleka rebel.
A Reuters news agency witness saw four people with injuries, including one seriously hurt by shooting that appeared to come from French forces deployed in the "Sangaris" peacekeeping operation.
However, a Seleka spokesperson told Reuters that French troops opened fire on a crowd of people, demonstrating against a decision made by peacekeepers to disarm the Seleka rebels.
Seleka rebels allege that up to three civilians were killed and six others injured in the violence.
It was not possible to independently verify this claim.
A French military official denied troops killed civilians and said they fired warning shots in the air after coming under
fire in Bambari, the headquarters of the mostly-Muslim rebel Seleka coalition, which controls the northeast of the country.
Following a meeting on Wednesday, the peacekeeping troops had demanded that members of the Seleka hand over weapons.
Christians and Muslims were living peacefully here. It is the French who have created this violence
Crowds of civilians carrying machetes and hunting rifles took to the streets early on Thursday in protest to the decision and blocked roads in the centre of Bambari with market stalls and furniture.
Muslims in Bambari are unwilling to disarm after similar moves in the capital Bangui led to attacks on Muslims there.
"There were two deaths and a third person who was seriously wounded has now died," said Seleka spokesman Ahmad Nijad Ibrahim. "Christians and Muslims were living peacefully here. It is the French who have created this violence."
French forces shut off the main road leading southwest from Bambari to Bangui as a precautionary measure.
"International forces are in Bambari to apply confidence-building measures which forbid armed groups from circulating with their weapons in the town," said a French military official who declined to be named.
The town was still tense at nightfall and occasional shooting could be heard. Fires burned at barricades and people
walked around armed with bows and arrows and machetes.
The former French colony descended into chaos after Seleka rebels seized power in March last year and their attacks on the majority Christian population set off a wave of revenge attacks.
The coalition was forced to relinquish power under international pressure in January.
Since then, Christian militias known as "anti-Balaka" have mounted widespread attacks on Muslims.
More than 2,000 people have been killed in the violence and a million of the country's 4.5 million people have been forced to leave their homes despite the presence of several thousand African peacekeepers and European Union and French troops.