Rio de Janeiro  - Twelve people died on a bloody Saturday in Rio's slums as rival drug gangs clashed in a shootout with police that ended in a riot.

Two police officers were among the dead.

Officials said a police helicopter was shot at during the clash in the favela, or slum, called Morro dos Macacos (Ape Hill) in the Vila Isabel neighbourhood, causing it to make an emergency landing. The helicopter caught fire, killing two police officers in the flames.

Residents reported "war-like conditions."

Five people, including three police officers, were injured in the shoot-out in broad daylight. Tires and at least five busses were set on fire, media reports said. The bus company estimated damage at 1.5 million dollars.

Police set up a crisis team to manage the situation.

The helicopter was headed to a fly-over above the favela in Rio's northern section when shots were suddenly fired at the partly- armoured aircraft. The pilot managed to land on a football field, but the helicopter caught on fire and exploded.

Rio has hundreds of favelas, many of them run by the tyranny of drug gangs who possess modern weapons including stinger rockets. The airspace over some of the favelas is blocked to air traffic, and police only venture into the slums with heavily armoured vehicles. (dpa)