A faction of the National Coordination for Change and Democracy (CNCD) had called the protest for 11:00 am (1000 GMT) in defiance of an official ban on demonstrating in Algiers. But several dozen demonstrators found themselves quickly surrounded by police.
Counter-demonstrators carrying photos of President Abdelaziz Bouteflika chanted "Bouteflika Is Not (Hosni) Mubarak" the Egyptian president forced out by a popular uprising on February 18 as they chased and roughed up the anti-government protestors.
The counter-demonstrators, mostly young people, then turned on Said Sadi, a member of the CNCD and the head of the small opposition Rally for Culture and Democracy, saying they would "lynch" him, according to an eyewitness, adding that Sadi fled the scene after shouting: "We will continue to march regardless of the steps the regime takes to prevent us."
Saturday's foiled protest was the sixth attempt since January 22.
It was planned to begin in three different locations to make it harder for police to shut it down. Previous bids at holding a substantial demonstration have also been foiled.
The authorities have always said that they are not prohibiting marches in the country in general but that there has been a ban in the cpaital Algiers since June 2001 after a bloody demonstration by members of the Kabyle community.
The CNCD has said it wants the immediate end of Bouteflika's regime, citing the same problems of high unemployment, housing and soaring costs that inspired the uprisings in Tunisia and Egypt.
Bouteflika, 73, promised on February 24 to place "anti-corruption" at the heart of government action, along with reforms to help the economy, employment and housing to regain Algerians' support.