Two people were killed when police opened fire on anti-government protesters in Arusha on Wednesday [AFP]

Freeman Mbowe, the chairman of Tanzania's opposition party Chadema has been released on bail by a local court, a day after police shot dead two anti-government protesters.

After being released along with a group of other opposition legislators and their supporters on Thursday, Mbowe urged his followers to continue to fight for their rights.

"We are brave leaders, we will keep fighting for our rights without fear, we will not be afraid to suffer or get injured while defending our nation and we are requesting the youth, women and elders of Arusha, to understand that we know there are laws and orders of ruling the country," he said.

Following his release, Mbowe and other Chadema leaders visited a local hospital where a dozen opposition supporters were admitted with gunshot wounds and other injuries after riot police fired at crowds of protesters during a banned rally in the northern town of Arusha on Wednesday.

Several thousand supporters of the Chadema party had gathered in the town centre to protest what they say was the fraudulent re-election of Jakaya Kikwete, the president, in October.

Several protesters were taken in by police who fired to disperse crowds trying to march on the police headquarters.

The provincial police chief said 49 Chadema members had been arrested, including Mbowe and Wilbrod Slaa, the party secretary-general and who ran in the October presidential election and finished second.

Mbowe said they had information that the police had used live ammunition which caused deaths during the protest.

"A lot of people have been shot by live bullets and some have been fatal," he said.

"We have information that few people have lost their lives following the wounds inflicted to them by the police force using live ammunition including the tear bombs. And now we have to form a committee which will probably come and visit this hospital to find out what we can do."