The protesters were pushed back as police dogs and capsicum spray were deployed.
Fairfax Media saw a number of arrests and seriously injured protesters. One protester being taken away by ambulance spat at officers and chanted "Allahu Akbar".
Speakers addressing the angry crowd called for calm.
"We are going to pray," a speaker said. "The other important thing is our brothers want our arrested brothers out. There is not going to be any more violence.
"Our anger and emotion is purely for Allah and his message," he said.
Abdullah Sary, a speaker at the protest, said the protesters came in peace and were disappointed police used tear gas and the dog squad.
"The anger comes from the fact if you attack the prophet you are attacking our way of life," he told Fairfax Media.
"This was a non-violent protest but people don't like seeing their brothers attacks by dogs and ending up in hospital."
A speaker said to the protesters: "The person who made this video must be held responsible." He received a loud cheer amid chants of "Allahu Akbar".
Late in the afternoon a lone man from outside the group shouted: "Shame on you for promoting murder in the name of religion."
The crowd swarmed at him attacking him and sparking a second wave of violent clashes with police.
Police rushed to the man's aide and dragged him out of the park under a rain of waterbottles, sticks and abuse.
More to come
Read more: http://www.smh.com.au/nsw/police-gas-sydney-protesters-20120915-25yrb.html#ixzz26WEyQY3S