Desire Malodra, a local civil society representative, said the militia had "killed, burned, and pillaged" the Plaine Savo camp for the displaced in Ituri province early Thursday morning.
"We found seven bodies -- five children and two adults," he said.
The Cooperative for the Development of the Congo (CODECO) insurgents, one of myriad armed groups operating in the restive, mineral-rich region, have been responsible for multiple brutal massacres over the past decade.
They claim to represent the Lendu ethnic group, acting in response to attacks from the Hema community, with which it has a longstanding rivalry. However, its grievances are unclear.
Early on Thursday morning, "protesters gathered in front of the MONUSCO base, throwing stones," the spokeswoman said, adding that three peacekeepers and five protesters had been lightly injured.
She said the situation has since been brought under control.
Dr Aime Londjiringa, who manages a health center in Bule near the camp, said 23 injured people had arrived, three in "critical condition."
He said seven of them had been injured at the camp, and the others during the protest, including one with bullet wounds.
UN deputy spokesman Farhan Haq said on Wednesday there had been a "significant deterioration of the security situation" in the Ituri region.
He said at least 195 civilians have been killed in the area since December.
According to an AFP tally, more than 60 people died last week alone, most at the hands of CODECO, one of the most violent of over 100 armed groups in the eastern DRC.
Last February, the CODECO militia killed 62 people in a grisly machete attack at the same camp.
According to Malodra, angry residents of the camp then attacked and "vandalized" the base of the UN peacekeeping force MONUSCO in anger over their failure to intervene.
A MONUSCO spokeswoman, speaking on condition of anonymity, said a patrol from the force had "gone to secure the site" after the militia attack on the camp.
The Lendu and Hema communities have a longstanding feud that led to thousands of deaths between 1999 and 2003 before an intervention by a European peacekeeping force.
Violence resumed in 2017, blamed on the emergence of the CODECO, which says it represents the Hema community.
Ituri has also been hard hit by violence attributed to the Allied Democratic Forces (ADF) -- a group of Ugandan origin which the Islamic State group claims as its central African affiliate.