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Haiti President Jovenel Moise (3rd L) Image Credit: AFP

Port-au-Prince: The Haitian capital of Port-au-Prince was on lockdown Monday after Haitian police attacked the army headquarters to demand better working conditions, sparking a gun battle that left two servicemen dead and a dozen wounded.

The main roads through the city were blocked and smaller streets were deserted, leaving the capital cut off from the rest of the country.

In a statement issued late Sunday, the government said it had observed "with concern and dismay that terror has reigned in certain arteries of the Port-au-Prince metropolitan area."

In order to avoid a "bloodbath ... it has been decided to cancel the carnival," which was scheduled to take place Tuesday, the statement said.

The government has made no further public announcements since then.

Embattled President Jovenel Moise is working on forming a new government, a source close to the country's leader told AFP, noting that it was down to the police to restore order to the streets.

The police had not reacted to the unrest by Monday. Some of the protesting officers went as far as to seize the keys to the force's few vehicles and use them to block some roads.

The army said their headquarters were attacked Sunday by gunmen wearing masks.

"We are under siege. We are coming under fire with all kinds of weapons - assault rifles, Molotov cocktails, tear gas," General Jodel Lessage told AFP during the assault.

He said soldiers had returned fire but did not give any casualty figures, nor could he say how many people were at the army headquarters, near the presidential palace, at the time of the attack.

One of the protesting officers, who had been among five policemen sacked from their jobs, said that at least one of his comrades had been killed and several others wounded in the gun fight with the army.

The Champ de Mars, the area where the clashes broke out Sunday, was still inaccessible a day later. Even guards from the presidential palace - who normally conduct regular patrols there - were avoiding it as too dangerous to enter.

For months, Haitian police have been demanding better working conditions, in particular the right to form a union so as to ensure transparency in talks with the police hierarchy.

Last week, some officers took to the street, blocking them and setting fire to cars.

On Saturday, Moise announced measures designed to ease the crisis, including the creation of a compensation fund for families of police who die in the line of duty and a fund to provide officers with insurance.

Haiti has witnessed a spike in kidnappings for ransom since the beginning of the year and fighting between rival crime gangs, which regularly set up roadblocks on Haitian highways.

The destitute Caribbean country has also been gripped by a political crisis for more than a year as people demand the resignation of Moise.

Since coming to power in February 2017, Moise has faced the anger of an opposition movement that refuses to recognize his victory in an election widely seen as dubious. Moise is also accused of corruption.