New Zealand soldiers, members of the 2,200-strong foreign peacekeeping contingent, estimated that about 100 vehicles were in a convoy on its way into Dili.
They said from their checkpoint at the edge of the city that they were not allowing vehicles to leave to meet the convoy.
Earlier, a small truck loaded with young men shouting "Viva Alkatiri" and about a dozen other trucks and vehicles were met by a heavy military presence about 10km outside Dili.
Peacekeepers, who have been deployed there since May when the tiny nation was rocked by violence leading to at least 21 deaths, searched the men and their vehicles.
They were being held behind two armoured vehicles on the narrow coastal road into Dili.
One man held a stick topped with a large dead bat on whose stretched wings was written: "Viva Fretilin", the ruling party of Alkatiri.
"We still appeal to all the people, the president and the multinational forces to take responsibility and prevent any violence"
Jose Reis, the Fretilin spokesman, told AFP that "thousands" of people were joining the drive into Dili. He said they planned to circuit the city and hand in a letter to President Xanana Gusmao to ensure their voices were heard.
"We're asking the president to respect Fretilin because prime minister Alkatiri resigned under pressure from the president and so far no successor has been chosen," he said.
"We still appeal to all the people, the president and the multinational forces to take responsibility and prevent any violence."
Peacekeepers made announcements by loudspeaker to people living on the edge of the city and along the planned route of the protest, urging them not to provoke the demonstrators and also assuring them that they would provide security.
Just outside the city, anti-Alkatiri protesters hung a banner showing the former prime minister with his head in a noose with the words: "Alkatiri is a butcher."
Alkatiri has been accused of giving his approval for a hit squad to be armed so it could eliminate his political opponents. He has denied the allegations but is due to be questioned over them on Friday.
In the capital, armoured vehicles were based near main government buildings.
Nearly 150,000 people have fled from their homes since May, and makeshift refugee camps are preparing for more arrivals amid this week's renewed unrest.