There were conflicting reports about the death toll from the clash.
A hospital official in Rawalpindi, Nasir Mahmood, said eight people died from knife and gunshot wounds, and 35 were wounded. Fifteen of the wounded are still being treated, he said.
But Oneeb Anis, a spokesman for Ahle Sunnat Waljamaat, claimed 11 seminary students were killed and many more were still missing. Ahle Sunnat Waljamaat is believed to be a front for Sipah-e-Sahaba, an anti-Shiite militant group that has been banned by the Pakistani government.
The two sides clashed because the Shiites were upset that Sunnis from the seminary were broadcasting their Friday sermon over loudspeakers, said Anis and Amir Kazmi, a Shiite who was involved in the procession.
The two sides threw stones at each other and traded gunfire, Kazmi said.
Some of the Shiites snatched rifles from policemen and stormed the seminary, said Anis. Pakistan's Geo TV showed video footage of a Shiite dragging a police officer in an attempt to steal his rifle.
Anis said the Shiites dragged Sunnis out of the seminary, and shot and stabbed them. A meeting of Sunni scholars is scheduled to be held later Saturday to decide on a future course of action, he said.
Dozens of shops outside the seminary were set on fire during the clash. Two Shiite mosques were also set on fire overnight, said fire department official Mohammad Mazhar, in apparent retaliation.
The Pakistani Taliban on Saturday vowed to avenge the killings of Sunni Muslims in Rawalpindi.
"Yesterday, Shiites killed our Sunni brothers in attacks on a Madrassa (seminary) in Rawalpindi. We announce that we will avenge this attack," Ahmed Ali Intqami, a spokesman for the Tehrik-e-Taliban for Rawalpindi told The Associated Press from an undisclosed location.
He said "we will punish Shiite infidels for killing our people, and we will teach them a lesson very soon."