The clashes came as a result of the killing of two Christian brothers accused of writing a blasphemous pamphlet critical of the Prophet Mohammed (PBUH) outside a court in Faisalabad.
Two people were reported to be injured as a result of the firing.
Police used Armored Personal Carrier vehicles to control the situation and resorted to aerial shelling to disperse the people.
An unidentified youth shot dead pastor Rashid Emmanuel, 32, and his brother Sajjad, and left their police escort critically wounded, as they left a court hearing, police official Amanullah Khan told AFP.
"Both brothers were rushed to hospital where they were pronounced dead," Khan said.
Doctor Rana Bashir, chief of Allied Hospital, confirmed the deaths and said the wounded police officer was undergoing surgery.
In another development, Regional Police Officer Aftab Cheema and Commissioner Tahir Hussain have held a meeting with Bishop Joseph Cots. Both expressed their grief over the killing of two Christian brothers. They also assured the Bishop of arresting the culprits soon.
The brothers were arrested on July 2, with their supporters claiming the charges against them were trumped up.
James Aftab, a senior church official in Faisalabad said the men had been "implicated in a fake case" while Atif Jamil Pagaan, a spokesman for Pakistan Minorities Democratic Foundation, also said the men had been set up.
"The charges levied on them are false as no evidence has been brought and no witness was present," he said, adding that the pamphlets were handwritten and photocopied, and anonymously distributed with the brothers' contact details.
Earlier this month, about 400 demonstrators burned tyres and held protests in the low-income Waris Pura neighbourhood of Faisalabad, a slum inhabited by nearly 100,000 Christians, demanding the death penalty for the accused.
Pakistan's blasphemy law carries the death penalty although no one has ever been sent to the gallows for the crime.
Human rights activists want the legislation repealed, saying it is exploited for personal enmity.
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I request The Respected Chief Justice of Pakistan and Chief Minister Punjab to please take some serious action on whats going in the country. I must say that the law is to protect citizens not to kill them. Judges should take decisions not the men with guns.