The demonstrators on Saturday shouted slogans and carried placards reading “Hanover against Nazis” and “Stand up to racism”.
Some of the protesters staged sit-ins to block access to the venue holding the congress of the anti-Islam, anti-migrant party, delaying its start by nearly an hour.
“We are ashamed that the AfD was voted [in Germany’s last election], and we don’t want them to be in our town and our congress hall,” a female protester told Al Jazeera.
“There is a fight in Germany against racism and Nazis too,” another demonstrator added.
After some minor scuffles with protesters, police deployed water cannon in frigid weather to remove some of the blockades. At least one demonstrator and several police officers were injured.
AfD won almost 100 seats in parliament in Germany’s September’s election, but two senior members quit in protest against what they saw as an unstoppable populist streak.
It could now become the country’s official opposition party if Chancellor Angela Merkel enters into a coalition with the Social Democrats.
Al Jazeera’s Aela Callan, reporting from the congress in Hanover, said there was a split in the party. A more moderate camp supports grooming the AfD for participation in more mainstream politics, while the hardline faction is resisting that, she said.
Joerg Meuthen, a hardliner, was re-elected as co-leader with an overwhelming 72 percent of the vote.
But when the relatively moderate Berlin AfD chief Georg Pazderski failed in two ballots to win the vacant seat of ex-co chair Frauke Party, both he and his rival, Doris von Sayn-Wittgenstein, withdrew.
The party’s powerful parliamentary group chief Alexander Gauland was then recruited to run alone and won the co-chair post.
Saturday’s leadership vote should have united the party, but its members failed to do so, according to analyst Timo Lochocki.
“The fundamentalists and moderates in the party showed today that they are incapable of uniting behind one candidate,” he told Al Jazeera from the congress.
“It means that it will be a very long time until this party is capable to offer a coherent platform, until they are capable to distance themselves from radical, anti-constitutional elements, and until they are ready to pose a serious threat for the main parties.”
Founded in 2013 as a vehicle to promote a eurosceptic agenda, the AfD has since shifted its focus to immigration and Islam.
Bernd Lucke, the AfD’s first leader, resigned in 2015, citing concerns the party had become “Islamophobic and xenophobic”.
The move was fueled by the onset of Europe’s refugee crisis which, having reached its peak by 2015, provided fertile ground for the AfD to sow their scepticism of multiculturalism.
At the time, the party polled at around three percent nationally.
Under Merkel’s leadership, Germany opened its doors to more than one million refugees and migrants, prompting fierce criticism from the AfD leadership.
Polls suggest the party will win seats in elections next year in the southern state of Bavaria and the western region of Hesse, which would give it a foothold in all of Germany’s state parliaments.