State Attorney General Adonai Carrion says the gunbattle took place late Thursday on the outskirts of the capital, La Paz.
During the fighting, suspects destroyed a police patrol vehicle with a grenade launcher. Two people were arrested, one of whom was wounded.
Carrion yesterday said that one of the detained is a suspected leader of a group of hit men who is linked to at least 20 homicides in La Paz and the murder of a woman in Sinaloa state.