Habibur Rahman, deputy commissioner of Chittagong Metropolitan Police (West Zone), said Shibir men first hurled cocktails targeting police at Alangkar intersection around 1:00pm.
Police opened fire in self defence, triggering a gunfight, the DC said.
One killed during the gun battle, he said adding that identity of the deceased could not be known immediately.
Witesses said a group of 100 pro-hartal activists equipped with sticks and brick chips launched an attack on a police box and also blasted 15 to 16 cocktails targeting the law enforcers.
Police fired gunshots to disperse them leaving one dead on the spot, they said.
The attackers also set fire to a pick-up van during the incident.
Additional police and Rapid Action Battalion (Rab) personnel have been deployed in and around the area to stave off further trouble.
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