"Officially, we know that three people were killed last night," police spokesman Gideon Kibunjah told Reuters.
"We suspect they were slashed with crude weapons, but police intercepted a gang suspected to be one of the groups and shot dead two of them," he added.
Kibunjah said the violence in Nairobi's sprawling Mathare slum was by the rival Mungiki and Taliban groups over protection money levied by one of them on brewers of an illegal drink.
"We have heard that some of the brewers protested against paying Mungiki to be able to sell their brew and therefore hired the Taliban to protect them. It is these two vigilantes fighting," Kibunjah said.
He said the situation was under control but said the groups were armed with guns.
"The escaping gang opened fire at the police as they moved into the area last night," he said.

Copyright Reuters, 2006