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About 200 young demonstrators chanting "Reformasi" -- Anwar's pro-reform battlecry -- took to the streets after Friday prayers but dispersed after a police water cannon moved in.
Security was tightened around the nearby legaislative complex ahead of a budget speech by Prime Minister Mahathir Mohamad, who took over the finance post after sacking Anwar last month following a bitter feud.
Several dozen police backed by at least one water cannon were positioned at the parliament.
Anwar was fired as deputy premier and finance minister on September 2. He was arrested after leading anti-government protests and remains in detention on corruption and sexual misconduct charges, which he denies.
Police earlier warned Anwar supporters against staging illegal protests at the National Mosque and parliament for the budget speech.
"We charged 128 people on Wednesday for illegal assembly and will not hesitate to do the same again," Kuala Lumpur deputy police commisioner Kamaruddin Ali was quoted as saying by The Star daily.
"No application for a permit was received and neither have we given our approval for the gathering," he said.
The 128 people were among 134 arrested last weekend for participating in what has become a weekly anti-government demonstration in support of detained former deputy premier Anwar Ibrahim.
Anwar supporters have used Friday prayers in this largely Islamic country to muster anti-government protests.
Kamaruddin said the police were well-prepared for any untoward incident and warned that the use of children as "human shields" to discourage police from moving in would only land their parents in trouble.
The newspaper said a group calling itself the Malaysian Reform Movement had urged people to assemble outside parliament after weekly Friday prayers.
The Malay-language Utusan Malaysia cited Kamaruddin as warning that police would use the Internal Security Act (ISA), which provides for detention without trial, against rioters.
He said that stern action needed to be taken against street demonstrators who had become more aggressive.
The newspaper said there were Internet sites and leaflets distributed urging those who assemble at the parliament Friday to bring stones, slingshots and crude firebombs.
Apart from the parliament gathering, Utusan said supporters of Anwar were also planning to continue their weekly protest in a downtown area, urging people to bring "small towels, kerosene and bottles."
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