Protesters Occupy Taksim Square as Police Tear Gas Demonstrators in Ankara, Istanbul

Thousands of people were on Sunday occupying Istanbul's Taksim Square, the epicenter of the worst demonstrations in a decade against Turkey's Islamist-rooted government which have seen almost 1,700 people detained and scores wounded.

A sea of protesters from across Turkey's political spectrum were camping out in the iconic square, chanting "Government, Resign!" and "Istanbul is ours, Taksim is ours!" as they celebrated after the police pulled out of the site on Saturday.

Taksim has been at the heart of a wave of more than 235 demonstrations in 67 cities nationwide, the biggest public outcry against Prime Minister Recep Tayyip Erdogan's government since it assumed power in 2002.

In Ankara, police fired tear gas and used water cannon to disperse some 1,000 protesters who were attempting to march on the high-security prime minister's office.

Private NTV news network broadcast live images of the protest in downtown Kizilay square.

Later on Sunday, police fired tear gas to disperse protesters near Erdogan's office in Istanbul, Agence France Presse reported.

The unrest began as a local outcry against plans to redevelop Gezi Park near Taksim Square, but after a heavy-handed police response quickly snowballed into broader protests against what critics say is the government's increasingly conservative and authoritarian agenda.

"They call me a dictator," Erdogan said in a speech on Sunday, a day after he called for an immediate end to the protests. "If they liken a humble servant to a dictator, then I am at a loss for words."

After two days of violent protests and appeals by Turkey's Western allies for restraint, the situation appeared to have calmed in Istanbul on Sunday after police pulled out of Taksim and officials took on a more conciliatory tone.

Interior Minister Muammer Guler said more than 1,700 protesters had been arrested nationwide since the start of the unrest, noting that most have since been released.

"A large majority of the detainees were released after being questioned and identified," he said in remarks carried by the state-run Anatolia news agency. He added that the country had seen 235 demonstrations since Tuesday.

The minister also warned against "misinformation being spread on social media," denying claims by rights groups and on social media websites that several people had been killed.

He said 58 civilians and 115 security officers had been wounded, while rights groups say hundreds of people have been hurt.

Authorities say almost 100 police vehicles, 94 shops and dozens of cars have been damaged since Friday.

The total damage to property is estimated at more than 20 million liras (over eight million euros), according to Guler.

Amnesty International has put the number of wounded in the hundreds and said there had been two deaths.

Erdogan on Saturday insisted his government would press ahead with the controversial redevelopment though he said the project may not include a shopping mall, as feared by protesters.

He also admitted "some mistakes" in the police response to the protest.

Eylem Yildirim, a 36-year-old housewife and protester in Taksim, said she expected the crowds to die down after the weekend but said the people had made their point and the government knew they were "bitter and at the limits of their patience."

Amnesty said some protesters had been left blinded by the massive quantities of tear gas and pepper spray used by police over two days while at least two people were hit in the head with gas canisters.

Turkey's Western allies Britain, France and the United States had earlier called for the Erdogan government to exercise restraint.

"We have learned our lesson," Istanbul mayor Kadir Topbas told NTV on Saturday.

He said he regretted "not informing the people enough" about the details of the construction project in Taksim.

Mass circulation newspaper Milliyet meanwhile plastered a picture of the packed square on its front page with the headline "Freedom Park".

Turkish officials said a dozen people hurt in the protests were being treated in hospitals, and that one of them was in intensive care after brain surgery.

Amnesty's Europe director John Dalhuisen said police excesses had become routine in Turkey "but the excessively heavy-handed response to the entirely peaceful protests in Taksim has been truly disgraceful."

Human Rights Watch said the number of injured was higher than official figures suggested and said one protester had lost an eye after police shot him with a plastic bullet.

The U.S. State Department had called on NATO-member Turkey to uphold "fundamental freedoms of expression, assembly and association, which is what it seems these individuals were doing".

French Foreign Minister Laurent Fabius told local media that Paris was calling for "moving towards a peaceful solution". But he rejected comparisons with the Arab Spring uprisings, saying: "We are dealing (in Turkey) with a government that was democratically elected."

Some 1,800 people also rallied in Vienna on Saturday to criticize the Erdogan government and show their support for the protesters in Istanbul.

The Turkey protests also follow a controversial new law introduced by Erdogan's ruling Justice and Development Party (AKP) that will restrict the sale and advertising of alcohol, a move that has sparked complaints that the government is trying to impose an Islamic agenda.

Erdogan's populist government is often accused of trying to make the predominantly Muslim but staunchly secular country more conservative and has also been criticized for its crackdown on opponents including Kurds, journalists and the military.