"The system is broken and what we are seeing today is not only because of the breakdown of this system, of the system's design, but for many other reasons," he said in a speech in Rio, Agencia Brasil reported.
There was chaos on one of Rio's main roads after gangs fought with police in the Cidade de Deus favela, causing the temporary shutdown of the busy artery.
The minister said crime gangs were not only working nationwide but internationally, and that the federal government did not have enough authority to intervene in states "except in extraordinary circumstances."
He also blamed financial woes in Brazil, which is emerging from its worst recession in history.
"The crisis has had an influence on this process -- the lack of resources being channeled into public security," he said.