Forces loyal to Chechen president Dzokhar Dudayev had blocked one entrance to the city with 10 tanks, Itar-Tass reported.
Crowds have demonstrated in support of Dudayev on the town's central square since the beginning of this week.
Khasbulatov said a march on the capital was called off "to avoid an armed clash," Tass reported.
The opposition instead held a rally in the suburb of Staraya Sunzha outside the city.
Khasbulatov has come to the forefront as the leading rival to Dudayev in Chechnya since he came back to his native republic two and a half weeks ago.
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