The police fired tear gas shells to disperse the protesters.
By afternoon the situation was brought under control in the Upper Kot area, Superintendent of Police (SP) City Atul Srivastav said.
They were demanding strict action against a man who allegedly shot dead two persons on August 7, the police said.
The SP said that the shoot out had taken place at the Railway Road area in the city's main shopping centre.
Following the protest, most shops in the Upper Kot locality remained closed.
The accused was arrested on the day of the incident, they said.
The police is patrolling all sensitive areas of the old city and para-military forces have been deployed to thwart any untoward incidents, the SP said.
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