"Five police officers were killed in a shootout with 'terrorists'" and some 30 were injured in the northern town of Kumanovo, Interior Minister Gordana Jankuloska yesterday told reporters.
"There are victims among the terrorists but for the time being we cannot give the exact number," she added.
Meanwhile, local papers in the Albanian language reported that five members of an armed group were killed in Kumanovo.
Police said earlier that the armed group illegally entered Macedonia from a neighbouring country, without elaborating. Local media suggested they came from neighbouring Kosovo, populated mostly by ethnic Albanians.
Jankuloska said the gunmen were planning to attack state institutions.
The gunmen were well-armed and had supporters in Kumanovo, police said earlier.
Macedonia's ethnic Albanian rebels staged an insurgency in the Balkan country in 2001.
During yesterday's police operation in Kumanovo, officers were met with "violent resistance" from snipers, grenades and automatic weapons, a police spokesman said.
The US embassy in Skopje had earlier issued a statement expressing condolences "to the families of the people killed and to those injured."
Armoured police vehicles were deployed across Kumanovo, with officers clad in bullet-proof jackets as helicopters hovered overhead, according to an AFP photographer.
Shooting continued yesterday evening, while dozens of people, mostly women, children and the elderly, were leaving the affected zone, some of them being evacuated by police, according to the photographer.
Police noted that "difficult terrain" was hampering the operation.
The incident comes less then three weeks after around 40 ethnic Albanians from neighbouring Kosovo briefly seized control of a police station on Macedonia's northern border, demanding the creation of an Albanian state in Macedonia.
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