Pro-democracy protesters had vowed to march even though thousands of police blocked their path last week. The move by the government to halt protests this weekend appeared to be working.
Leaders have promised to end a 19-year-old state of emergency by the end of February in a nod to increasing calls for reform.
Police brandishing clubs, but no firearms, weaved their way through the crowd in central Algiers, banging their shields, tackling some protesters and keeping traffic flowing through the planned march route.
Police at Saturday's demonstrations appeared to outnumber protesters in each of the groups scattered in sidestreets around May 1 square, a major roundabout.
Rising food prices led to five days of riots in Algeria last month that left three people dead.
The Associated Press contributed to this report.
