Rio de Janeiro, Brazil: The toll from stray bullets that rain down on Rio from the city's steep hillside slums as police and drug gangs battle with automatic weapons has grown sharply, with one innocent bystander killed or wounded every day.

Businesses and schools in the line of fire have been shuttered. Thousands of children are staying home. Even air travel is affected - domestic jet routes were diverted from Rio's downtown airport when shooting flared up in a slum near Copacabana beach that the planes had to fly over. And travellers avoid driving the Red Line highway to the international airport at night because it passes near one of the worst live-fire zones.

In-the-know tourists and business travellers are shelling out extra for beachfront views, as much to be safe from flying bullets from the slums that line the back of the tiny beach communities as for the view. And even in the city's best neighbourhoods, apartments facing the hillside slums can be worth 60 per cent less than units in the same building that are less likely to be hit.

Such concerns have become more urgent as the city of 8 million prepares to welcome thousands of athletes for the Olympic-style Pan American Games in July. While Mayor Cesar Maia stressed this week that Rio traditionally hasn't had major violence at its annual carnival and New Year's celebrations, the city plans to deploy 15,000 police to provide security during the games.

For the first time, the government has acknowledged the problem and has begun to track the toll from stray bullets in quarterly reports. It found they killed or wounded 87 people during the first three months of this year.

One of the latest victims, Ailton Lopes Moreira, was shot in the chest on Sunday on his way to the supermarket. It's likely no one will ever know who killed the 53-year-old engineer. Police believe the bullet was fired from over a mile away, from a shantytown where 47 days of open warfare between police and drug traffickers have killed 23 people and wounded at least 67.

"I thought it was a heart attack. It was only when the ambulance came that I discovered he had been shot," said the victim's wife, Lucimere Negrao, 45.

Rio de Janeiro is notorious for having one of the world's highest homicide rates.