The students, who claimed their action was peaceful, were calling for the removal of President Suharto and protesting at the rise in fuel prices yesterday.
Meanwhile, police fired live bullets at demonstrators in Medan. It is the first time police have taken such measures since civil unrest erupted this year in response to the country's economic austerity programme.
There were reports that several protesters were injured by bullets as rioting spilled onto the town's main highway. An angry crowd is also said to have torched a police station. Thousands of rioters also looted Chinese- owned stores in the Sumatran capital.
Previously most protests in the city were confined to students but a police spokesman said yesterday: "It's not a pure student protest anymore, because it involves ordinary people. There are thousands of angry people trying to burn houses. They are burning tyres and turning over cars."
There were also clashes between students and police in Bandung, Java.
On Monday, the government implemented austerity measures demanded by the International Monetary Fund in return for a $43bn bailout of the failing economy. Petrol prices have risen 71 per cent and kerosene, used as a cooking fuel by the poor, rose 25 per cent as a result of the end of government subsidies.