Party spokesman, Nelson Chamisa, said police prevented opposition supporters from attending the rally at which the leader of the MDC, Morgan Tsvangirai, had planned to launch his presidential campaign.
Police tried to block the rally last week, arguing they did not have sufficient manpower to guarantee law and order.
The MDC obtained a court ruling yesterday allowing its members to go ahead and hold the rally, but police ignored the ruling, Mr Chamisa said.
He said there were serious skirmishes between the protesters and police.
He said the poor suburb of Highfield, where the rally was held, now resembled a “battleground”.
Shopkeepers closed their stores and some people fled their homes, he said.
There were reports of children fainting because of the tear gas, he claimed.
“It’s turned into a war zone,” he said. “This is a fully fledged police state.”
Assistant police commissioner, Wayne Bvudzijena, told state radio the rally was not sanctioned, a decision which he said was based on previous acts of violence by the opposition party’s supporters.
He said police were still compiling information on the number of people arrested and the damage caused, and added police were maintaining a “heavy presence” in the suburb.
President Robert Mugabe’s opponents have been incensed by the 82-year-old leader’s plans to defer presidential elections by two years from 2008 to 2010.
Scores of women demonstrating against the plans were arrested in protests in Harare and the second city of Bulawayo last week.
There were clashes between police and opposition supporters on Friday in Harare, prompting authorities to issue a stern warning over state radio that they would not “accept anarchy”.
A senior opposition party official, Tendai Biti, and a second opposition lawmaker were reported to have been arrested outside Harare’s High Court in connection with the clashes.
Tension is rising in Zimbabwe, where a six-year economic crisis is worsening. Inflation is around 1,600% and unemployment is at 70%.
There are critical shortages of power, fuel, foreign currency and medicine.