Police in Cologne began dispersing a far-right protest march on Saturday, after bottles and firecrackers are hurled at officials, a spokeswoman said.
The protest had been organized by the Islamophobic Pegida movement and a local extremist group in response to series of violent assaults against women by attackers identified as mostly North Africans and Arabs in the west German city on New Year's Eve.
Witnesses reported protesters throwing items at officials and said scuffles erupted shortly after the procession began.
One journalist was injured in the clashes, according to the police spokeswoman. Witnesses also reported other casualties, including people with cuts to the face.
Police used a loudspeaker to threaten the crowds with water canon and truncheons, before halting the event and later cancelling it completely.
Officials said that around half of the 1,700 people marching in the Pegida demonstration were involved in the violence.
Around 1,300 counter-demonstrators also rallied behind the city's main train station, police said.
The station was where mass sexual assaults and thefts took place during New Year's Eve celebrations, stunning the nation and inflaming the country's migrant debate.
Hundred-strong teams of police were deployed to locations across the western German city, totalling 1,700 officers.
The scene on Saturday afternoon underscored the division in German society over the government's open-door migration policy, which allowed more than 1 million people to enter the country last year.
Pegida said 3,000 of their supporters had turned out for their joint rally with members of the right-wing extremist Pro Cologne party. Some in the crowd wore stickers demanding that Chancellor Angela Merkel "must go!"
Around 1,000 intoxicated men are thought to have robbed, sexually assaulted and in some cases raped women during turn-of-the-year celebrations. More than 170 complaints were filed.
Of the 32 suspects identified by police in Cologne, 22 are asylum seekers, the German Interior Ministry said. One suspect was carrying a document with Arabic-German translations of sexist phrases and threats, which mass-circulation tabloid Bild published on Saturday.