U.N. military commanders said at least one U.N. peacekeeper was wounded, but neither civilian nor military U.N. officials would confirm that U.N. troops had fired back at any point.
Any such U.N.-Liberian battle would mark the first engagement by international forces, deployed here since early August in the run-up to an Aug. 18 peace deal between rebels and fighters loyal to warlord-president Charles Taylor.
The fighting comes amid three days of rampages by Taylor troops demanding immediate cash for giving up their guns under a four-day-old U.N. disarmament program.
U.S., U.N. and Liberian leaders condemned the violence as gunfire continued through Tuesday night into early Wednesday morning, demanding in repeated warnings on state radio and in statements that fighters lay down their arms.
At daylight Wednesday, Associated Press journalists saw eight bodies lying in the streets on the capital's eastern side.
The bodies appeared to be those of government-allied militia fighters, dressed in civilian clothes.
Hundreds of Taylor's forces surrounded the dead men, looking at them in disbelief.
Residents and police officials, all speaking on condition of anonymity, said militia fighters had challenged a 10 p.m. curfew imposed late Tuesday to try to stop the rampages.
Residents said Nigerian U.N. peacekeeping troops rolled in with armored vehicles in response.
U.N. peacekeepers and militias exchanged fire, a top Liberian police official and residents in the area said.
U.N. spokeswoman Margaret Novicki said she knew of no firing by U.N. troops, and said she knew of only one casualty, a woman killed Tuesday by stray bullets during the rampages.
A U.N. commander, speaking on condition of anonymity, said one U.N. commander from the West African nation of Benin was shot in the leg when his men tried to arrest militia members at a checkpoint late Tuesday.
The commander insisted he did not know of U.N. troops returning fire.
Extra U.N. forces were out on the streets Wednesday, and schools were closed.
U.S. Ambassador John Blaney demanded over state radio late Tuesday that militia fighters surrender their arms.
Insisting all sides in American-founded Liberia stick to their peace pledges, Blaney repeated international officials' standing warning: "This is Liberia's last chance."
Gyude Bryant, Liberia's interim leader under the peace deal, also went on state radio, warning that the rampaging troops would be arrested and brought before a war-crimes court.
In a statement, U.N. envoy Jacques Klein, an American, called it "unfortunate that a small criminal element has attempted to disrupt what is a major international effort to bring peace, security and stability to the Liberian people."
Klein pledged that disarmament would continue. The U.N. says it will oversee disarming of 40,000 rebel and government fighters in the next nine months — although the violence disrupted the start of government disarmament, and rebels have stalled on the start of their arms surrender.
Taylor, a Libyan-trained guerrilla fighter, launched Liberia into conflict in 1989. An estimated quarter-million Liberians died in the 14 years of bloodletting that followed, until Taylor fled into exile in Nigeria on Aug. 11.
West African peace forces led the international deployment here. The United Nations took charge of the peace force 2½ months ago.
By Jonathan Paye-Layleh