Police killed at least two suspected drug traffickers on Monday during a day-long shootout in the hills overlooking one of Rio de Janeiro's wealthiest districts, the latest in a wave of violent clashes that elsewhere in the city caused 8,000 children to miss school.

The shootout, in the Pavão-Pavãozinho slum above the beachside neighborhoods of Ipanema and Copacabana, highlighted what many Rio residents fear is a sharp decline in security just two months after the city hosted the Olympics and as public security budgets have been slashed because of Brazil's worst recession in nearly a century.

After several weeks of confrontations between police and suspected criminals, the neighborhood erupted early on Monday in shooting that lasted until late afternoon. Police vehicles blocked nearby roads and police helicopters circled overhead.

A video posted online by local media showed one of the drug trafficking suspects plummeting from a stone hillside after being shot in one exchange.

A police spokesman said two suspected criminals had been killed and that the commander of a police squad for the neighborhood had been injured.

In Cidade de Deus (City of God), a slum whose violent history was profiled in a 2002 Oscar-nominated film of the same name, confrontations between police and local gangs led to the closure of 21 schools on Monday. At least two policemen working in the area have been killed recently.

The violence comes as criminals seek to retake territory that police occupied during the recent economic boom, the 2014 World Cup and the 2016 Olympics. It coincides with a recent uptick in robberies, assaults and homicides across metropolitan Rio.

Security experts said the economic downturn, rising unemployment and enfeebled public finances had emboldened criminals and many of the drug trafficking gangs that in recent years had been in retreat.

Pavão-Pavãozinho, a community of more than 10,000 residents, was one of the first neighborhoods to benefit from a now-struggling effort by the state government to "pacify" long-violent favelas, as the slums are known in Rio.