The incident, which took place yesterday, erupted in the flashpoint PK5 neighbourhood as security forces backed by UN peacekeepers went in to question the leader of an armed group, known as "Big Man".
"Big Man and his entourage resisted. An exchange of fire erupted and the leader was neutralised along with two of his men," a police source told AFP.
Sporadic gunfire continued until nightfall, with militia members retaliating to the arrest operation by surrounding a local apostolic church and killing the pastor, the source said.
Even though relative peace has returned following the civil war that erupted in 2013, inter-communal tensions remain.
Also Read
As the church pastor tried to urge worshippers to leave, he was attacked and stabbed to death, a family member told AFP.
The information was confirmed by a local peace activist, who identified him as Jean-Paul Sankagui, a former government adviser.
"Jean-Paul Sankagui, pastor of my church in PK5, was killed and the church was torched," Lazare Ndjadder told AFP.
The main culprits in the violence were factions from the Seleka force, and the Christian "anti-Balaka" (anti-machete) militias.
Disclaimer: No Business Standard Journalist was involved in creation of this content