An estimated 800 Brazilian Army parachutists were Friday occupying the main routes of access to the Complexo do Alemao slum in Rio de Janeiro, where 200 alleged criminals fled for refuge after a raid on another slum.
The death toll in the week-long action to rout out drug gangs had reached 38 by Friday.
Television footage showed the flight Thursday of hundreds of armed members of suspected drug gangs fleeing the nearby Vila Cruzeiro after Brazilian police stormed that slum with the aid of the Army's armoured vehicles and helicopters late in the day.
The Complexo do Alemao, where the thieves are believed to be holed up, includes 10 favelas (slums) with some 65,000 people, and analysts considered it likely that police and the Army were moving to storm it within the coming hours.
The raids involving more than 20,000 police and army units were the largest in Rio de Janeiro's history. They come as Brazil prepares to host the football World Cup in 2014 and the summer Olympics in 2016, precisely in Rio. The plan is to break the power of the drug gangs in the favelas before then.
Brazilian President Luiz Inacio Lula da Silva authorised late Thursday the deployment of Army officers in Rio, and Friday emphasised that they would not be involved in arrests - only police would be doing that.
From Guyana, where he was taking part in a summit of the Union of South American Nations (Unasur), Lula promised his "total support" for city authorities in their fight against crime.
The Army provided logistical support for the operation as early as Wednesday, including six armoured vehicles and other equipment. Lula further allowed the deployment of 300 federal police officers, two helicopters and 10 armoured transport vehicles, as well as night-vision glasses and communications equipment.
Violence on the streets continued Friday, despite the increased presence of security officers. The latest police report said 97 vehicles had been set on fire since Sunday, while clashes between police and alleged criminals claimed 38 lives and led to 197 arrests.
The official death toll did not include several people who were originally injured but died later of their wounds in hospital. According to the Health Ministry, the Getulio Vargas Hospital alone treated 33 injured in the past three days, six of whom died in hospital.
Suspects shot at a police helicopter that flew over the Complexo do Alemao Friday, although the aircraft suffered no damage, police said.
Rio de Janeiro state Public Security Minister Jose Mariano Beltrame refused Friday to reveal possible plans for an attack on criminals on the Alemao complex, and he sought to dispel the fears of a massacre that some human rights organisations have expressed.
"We are not going there with the goal to attack anyone," he said.
Police spokesman Henrique Lima Castro said the precise time for such an attack had not been decided.
"We are in no hurry. The troops are motivated. We have called in those who were on holiday, and now we have 21,000 men. Even some who had retired asked to return, because they want to be part of this historic moment. Based on my experience, the best thing these criminals can do is turn themselves in," he said.
General Adriano Pereira Junior, who was commanding the massive anti-drug operation, said many of the soldiers involved had been part of the UN Stabilisation Mission for Haiti (MINUSTAH), militarily commanded by Brazil.