The protesters, many of them young children, displayed banners and neatly printed posters saying "Uphold the sharia (rule of Muslim law) and a caliphate (a traditional Muslim government)".
Muslim women wearing veils, men and boys all donned white cloth headbands bearing the same slogan in Arabic, as scores of policemen, some armed with handguns, stood on guard.
Addressing the rally from a makeshift podium on the back of a truck, speakers called for a return to rule of a theocratic government, saying this caliphate form of government was the answer to the world's problems.
"Mankind now has a world that is almost without future and this is happening because the world is led by the inhuman ideology of secular capitalism," one speaker said, taking Hizbut Tahrir's official line.
The group's posters decried the fact that the last caliphate,
that of the Ottoman empire, was abolished in Turkey on 3 March 1924.
Speakers blamed the fall of the caliphate on "the British and the Zionists". Muhammad Ismail Yusanto, Hizbut Tahrir's spokesman, said the group hoped the rally would provide "guidance" about who to elect in the country's upcoming elections this year.
Indonesians are due to go to the polls to elect their
parliamentarians on 5 April. On 5 July, for the first time in
history, they will elect their president.
A second round of presidential elections is set for 20 September should the first round fail to produce a decisive winner.
"Mankind now has a world that is almost without future and this is happening because the world is led by the inhuman ideology of secular capitalism"
Hizbut Tahrir speaker
Hizbut Tahrir has been organising noisy but peaceful public rallies in many Indonesian cities and towns to advocate implementation of sharia in the world's largest Muslim-populated state.
But the government of incumbent President Megawati Sukarnoputri views efforts to impose a religious state as subversion.
Indonesian Muslims have been split into numerous political
parties representing a wide spectrum of opinion - from
fundamentalist, conservationists and moderate - but have so far been unable to forge a common stance on most key issues.
More than 80% of Indonesia's 214 million people