“The situation is very chaotic. Armed men are running around,” Hanan Saleh, a Human Rights Watch researcher in Tripoli, told the Associated Press. “We expect more dead.”
Libyan Prime Minister Ali Zeidan called on all armed militias to leave Tripoli on Friday.
"The existence of weapons outside the army and police is dangerous," he told reporters. "All armed militias need to leave Tripoli without exception."
The violence continued into Saturday in the suburb Tajoura on the outskirts of Tripoli.
Militiamen from Misrata battled local fighters leaving one dead.
The Prime Minister once again urged a cessation to the fighting, stating: "No forces from outside Tripoli should attempt to enter the city because the situation is very tense and could escalate further."
The militias are holdovers from the 2011 uprising that ousted dictator Muamar Gaddafi and now a powerful force in the increasingly lawless North African country.
More from GlobalPost: How militias took control of post-Gaddafi Libya
Residents of Tripoli frequently demonstrate against the militias, who have rejected calls from a weak central government to leave the capital.
Friday’s protest, organized by the Tripoli local council, or town hall, and promoted by imams at Muslim prayers held hours before, took place at the Tripoli headquarters of the Misrata militia. Two people died in a clash with the militia last week.
The protesters carried white flags to show they were peaceful.
Sadat al-Badri, president of the Tripoli local council, told Agence France-Presse the shots fired at the hundreds of demonstrators came from inside the headquarters.
"Tensions are on the rise in Tripoli. We're going to announce a general strike and launch a civil disobedience campaign until these militias leave," he said.
After the protesters were shot at, militia members holed up at their headquarters. Hours later, armed men stormed the compound and set some buildings on fire.
Al-Taher Basha Agha, commander of Misrata-based militia, said in a telephone interview with Libya al-Ahrar that the protesters fired first. “Who is the person who is inciting them?” he said. “The evil ones who are using the civilians as a bridge to cross to power.”
“This is a serious development in the capital that is reminiscent of events in Libya's second city, Benghazi, earlier this year when anti-militia protesters attacked bases and more than a dozen people were killed,” Rana Jawad, a BBC News correspondent in Tripoli, said. “If officials again react passively to the latest incident, it may fuel a cycle of revenge attacks which could spiral out of control.”
Following Friday's clash with the Misrata militia, the country’s highest Muslim authority, the grand Mufti, asked protesters to end their demonstrations and let the government take responsibility for ending the militias’ presence in the capital.
Agence France-Presse contributed to this report.