Violent clashes erupted late Monday in the clan's stronghold in the city's southern Sabra district, after police, controlled by the radical Hamas movement, tried to move into the area to arrest a member of the Doghmosh clan.
Witnesses reported heavy gunfire and the sound of explosions as police fought running gun battles with the clan killing at least 10 members with a further 35 wounded. A police officer has also been killed and five others injured.
The Doghmosh are one of the most powerful families in the impoverished region, with its members linked to the al-Qaeda terrorist organization.
The clan comprises the Army of Islam, a militant group, notorious for the kidnapping of BBC reporter Alan Johnston in 2007 and the capture of Israeli soldier Gilad Shalit in 2006.