Reuters reports that the massacre was in the Baixada Fluminense, which is largely poor and working class and certainly tough turf but not necessarily technically favela. That is, the residents may be legal owners, not squatters. It's interesting that all poor zones of Rio are sort of lumped together, which is part of what gives the favelas their bad reputation.
The victims were from all walks of life, including "a civil servant drinking in a bar, a young boy playing pinball, a cook on his way home from work and a transvestite prostitute."
As the article reports: "International human rights often criticize Rio police and say they have a history of summary executions. Security officials said police killed 983 “suspects” last year and 1,195 in 2003."
Makes you wonder who's more dangerous: the criminals or the cops.