Opponents say that the seven-day forum, which began on Thursday, is a cover for privatisation.
Participants from 121 countries, debated topics including the developing world's growing reliance on bottled water bought from private companies, instead of on public water systems, which some call a form of privatisation.
Cristina Hernandez, a protester, said: "We don't want privatisation because it will only serve as a business for someone. Services get more expensive with privatisation, but not better."
Some protesters marched past rows of riot police chanting: "Governments understand, water is not for sale!"
Loic Fauchon, the president of the World Water Council, a non-governmental group, called on the forum to provide massive donations to rebuild water systems in the poorest nations and largest cities.
He said: "A lot of poor people are leaving their countries to go to rich countries. Isn't it preferable, isn't it cheaper, to pay so that these people have water, sewage, energy, to keep open the possibility for them to stay in their [own] countries?"
He suggested creating a peacekeeping force - modelled after the UN "blue helmets" - but said "we don't want to override national governments, we just need a force that will take over in cases of water conflicts".
Protesters accuse the forum of
being a front for privatisation
Water clashes have already occurred in Mexico. In 2004, Mazahua Indians took over a treatment plant and cut off part of the capital's water supply, to protest against water extraction from their land.
Forum organisers denied pushing privatisation, saying that they were trying to promote better water management.
Jose Luis Luege, Mexico's environment secretary, said: "Nobody is talking about privatising a resource that is something inalienable, sovereign."
However, he said he strongly supported the idea of granting concessions for specific water projects to private firms.
While outright privatisation of public water systems has been lucrative, the private sector earns more money by selling bottled water to people in developing countries who often do not have drinkable tap water.
Unfit for washing
Mexico, for example, is now the second-largest consumer of bottled water in the world, behind the United States in terms of volume and behind Italy in consumption per head.
Sales of bottled water in China rose by more than 250% between 1999 and 2004. They tripled in India and almost doubled in Indonesia, according to a study released by the institute. Worldwide, the industry is now worth about $100 billion a year.
Tap water in some countries is so bad that it is unfit even for washing.
Javier Bogantes, director of the Latin American Water Tribunal, said: "You can't even brush your teeth without fearing that you're going to get who knows what infection."
Fauchon acknowledged the problem; holding up a bottle of branded water - the only drinkable kind available at the forum - he said "this right here costs 200 to 400 times what tap water would".