Thousands marched in protest against the government in Madagascar's capital on Monday after the president denounced unrest in which two people were killed as a "coup" intended to divide the country's people.

On Saturday, police fired teargas at an opposition demonstration held in protest against new electoral laws, where one person died and more than a dozen were treated for injuries, some caused by teargas canisters.

Another individual injured in Saturday's unrest, died on Sunday, Olivat Alson Rakoto, director of a hospital in the city, told Reuters.

On Monday, thousands of demonstrators, most of them dressed in white, assembled in front of the city hall and a public square, where the coffins of the two individuals killed at the weekend were placed on the ground, the Reuters witness said.

On Sunday President Hery Rajaonarimampianina had tough words for the protesters.

"What happened on Saturday is a coup," Rajaonarimampianina said. "Madagascar is a state of law and I warn those who sow unrest and incite people to tear each other apart that the state will assume the responsibilities that correspond to these actions."

Supporters of opposition politician Marc Ravalomanana, a former leader of the Indian Ocean island nation, say the new electoral laws are designed to block him from running in the election. The opposition is also challenging provisions on campaign financing and access to media in the laws.

"We protest these laws that were adopted by corrupted members of parliament," said Christine Razanamahasoa, an opposition lawmaker.

Harivonjy Randriamalala, a 42-year-old father of three children, said: "We want the president to resign. We want freedom of speech. We want elections in which all people can run."

Ravalomanana, who was removed in a 2009 coup, has teamed up with the man who succeeded him, Andy Rajoelina, to oppose the laws pushed by President Hery Rajaonarimampianina.

Before Monday's march began, General Beni Xavier Rasolofonirina, the defence minister, appealed to politicians to find an outcome that would avoid violence.

"The security forces invite politicians to discuss and find a political solution to a political problem. The police will never accept power that does not come from the electoral process," he said in a statement.

He said police would stay away from the area where people were marching.

"The police remind us that their mission is to protect the population and its property (...). To avoid violent clashes, the police decided to withdraw from the protected area (closed to demonstrations)."