The opposition Congress, TDP, BJP, Left and others supported the 'Save Dharna Chowk' protest organised by the Telangana Joint Action Committee (TJAC).
The protesters opposed government's decision to shift elsewhere the Dharna Chowk, currently located at Indira Park in the heart of the city, but residents of the surrounding area and Indira Park Morning Walkers Association backed the move, saying the protests at the place caused them inconvenience.
"Following heated arguments, two groups clashed and threw chairs at each other," deputy commissioner of police (central zone) D Joel Davis said.
Police also lathi-charged the protesters to disperse them.
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Earlier, members of TJAC and opposition parties including the Left, Congress, TDP, BJP and Telugu film star Pawan Kalyan's Jana Sena marched towards Indira Park holding placards and shouting slogans against the government.
The TRS government was suppressing the democratic right of people's organisations and opposition parties to express their views by shifting the site, they alleged.
Some TRS activists came and posed as local residents to say that Dharna Chowk should be shifted, Telangana TDP's working president A Revanth Reddy alleged.
Like Jantar Mantar in Delhi, Dharna Chowk has become a common site for protests and his party would continue to organise protests there, said the city BJP chief N Ramachandra Rao.
On the other hand, state Home Minister Nayani Narasimha Reddy alleged that some of the protesters beat up local residents and smashed up chairs. Opposing views should be respected in the democracy, he said.
A couple of months ago, the TRS government disallowed protests at the Chowk, saying they caused inconvenience to residents. But the alternative site is yet to be finalised.