Officials from Anwar's party on Monday said authorities sealed off a community hall in Klang town west of Kuala Lumpur, and ordered 600 People's Justice Party supporters to disperse after they had gathered there on Sunday night to hear leaders' speeches challenging Prime Minister Abd Allah Ahmad Badawi's government.
"The crackdown has damaged our hopes that Abdullah's new administration would be fair in the issues of human rights and freedom of speech," said the event organizer, Badrul Hisham Shaharin.
"We now believe that his promises to uphold justice and transparency are only empty promises," he said.
Opposition leaders had hoped the event would help rekindle public interest in Anwar - the Justice Party's figurehead and rallying point - before general elections expected in the next several months.
Anwar was former Prime Minister Mahathir Muhammad's deputy until the two fell out during a nascent challenge by Anwar, who was fired, then arrested in 1998 and sentenced to 15 years in prison on sodomy and corruption charges, which he claimed were fabricated.
Mahathir, who handed over to Abd Allah when he retired in October after 22 years in power, has denied a conspiracy.
The Justice Party - part of a coalition with Malaysia's largest opposition group - has since lost much of its political momentum.
At Sunday's event, two men were detained for about three hours after arguing with police. Party officials persuaded the crowd to leave to prevent an escalation in the standoff with about 80 police, Badrul said.
Anwar Ibrahim claims
he was framed
A Klang police spokesman refused to confirm any details.
The Justice Party over the weekend launched what it says will be a nationwide series of rallies, handing out leaflets and staging vehicle convoys to restore its waning profile and test Abd Allah's tolerance for dissent.
Police ordered party supporters, who travelled in 25 cars to distribute leaflets on Kuala Lumpur's outskirts on Saturday, to remove flags and posters from their vehicles.
However, the convoy made its rounds despite police roadblocks in some areas, Badrul said.