Kenscoff is a hillside town overlooking Port-au-Prince that has been the scene of frequent gang attacks over the last couple of years.
Rights groups have reported mass killings, rapes, arson and kidnappings, forcing thousands to flee their homes.
Haitian rights group RNDDH estimated 30 to 40 people had been killed and 15 to 20 wounded in the overnight raid, which began about 10.30pm on Sunday but warned it was still difficult to assess a complete tally.
Wails filled the air in Kenscoff as survivors found the bodies of friends and family strewn on the streets early on Monday.
"They killed my son!" one woman kept yelling as people nearby tried to comfort her.
One man flung himself on the side of the road, head on his right arm as he cried on the ground.
Nearby, people picked up the bodies of those killed, some wrapped in blood-spattered sheets.
Robert Jean recalled how he heard shooting before dawn and tried to rustle people from their sleep to escape being killed.
He said he was frantically looking for his brother, who was killed: "I was calling to see if everyone was safe. I could not find my brother."
Another Kenscoff resident blamed the government for the killings.
"If only we had a good police force that would have placed an armoured truck here, what happened here would have been prevented," said Verti Enold-Saint as he lifted a sheet over the body of his brother-in-law.
Farmer Mathurin Pierre, 41, told the Associated Press that he lost 14 loved ones and that an unknown number remain missing.
Haiti's prime minister's office on Monday afternoon decried the "heinous attack," noting all security forces were on high alert and reinforcements were being deployed.
"Kenscoff will not be abandoned," it said in a statement.
"The government's authority will be restored, without weakness and without delay, throughout all of Kenscoff."
Haiti's police did not immediately respond to a request for comment.
The community occupies a strategic position overlooking routes into Petion-Ville - home to several embassies, upscale hotels and the temporary seat of government - as well as routes from the capital into southern parts of the country.
Local media said several houses were set on fire, including the home of Jean William Pape, a leading public health expert in Haiti.
The attack occurred as the United Nations-backed Gang Suppression Force, which is mandated to help police fight gangs and replace an underfunded and ineffectual predecessor, plans to reach a full capacity of more than 5500 troops by the northern hemisphere autumn.
Haiti is scheduled to hold general elections for the first time in more than a decade on December 13, and it has been registering voters in Port-au-Prince and beyond.
with AP
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