Sources tell CTV News a blaze at a home in the 300 block of Agnes Street on Tuesday may have been caused by a firebombing in a gang retaliation incident.

"It's horrible. (Setting) a fire when…you know someone is sleeping. It's just wrong," said Chris Lauzon, a tenant in the home. A smoke detector woke him up and he was able to escape.

Lauzon has lived in the home for more than a year. He said since the upstairs tenants moved in a few months ago, he's been afraid something bad would happen.

He also believes the house was indeed firebombed. Even though he lost everything in the fire, Chris Lauzon said he's grateful to have escaped with his life.

Winnipeg police would only confirm that the fire is considered suspicious.

"We certainly do have concerns with regards to this fire right now. We do have members of our major crimes unit involved," said Const. Jason Michalyshen with Winnipeg police.

CTV News is told the home was a known drug den, with some members of a street gang living there. Sources said shortly before the fire broke out, there was a fight outside involving a rival gang member. Later, shots were fired.

Ralph McKellar lives next door. He heard gunshots and people yelling, but wasn't surprised by the incident.

"There's too much drug activity here – taxis three deep, traffic backed up on the street. People fighting and yelling," he said.

Just as the fire started, Fran Ottewell's nearby landlord noticed something strange.

"They saw two male figures, one taller, one shorter, carrying gas can and shortly after that there was a boom," said Ottewell.

Anyone with information on the fire is asked to call the major crimes unit at 986-6219, or Crime Stoppers at 786-8477.

- with a report from CTV's Caroline Barghout