Several thousand protesters led by hardline Islamist groups held a rally on Friday outside Indonesia's parliament to protest against what they called a growing threat from communism in the world's most populous Muslim-majority country.

Rows of police stood behind barbed wire with water cannons at the ready, but the rally was peaceful and the number of protesters far smaller than the estimated tens of thousands expected by organisers and police.

Some protesters prayed and unfurled banners rejecting communism and also a government decree targeting large organisations that was used to disband the Islamist group, Hizb ut-Tahrir Indonesia.

"The country is giving space to communists and their activities," said one protester, Mohamad Khairudin, 42, who had travelled from Surabaya, the country's second largest city.

"Members of parliament have communist sympathies. And at the same time they are limiting space for Islamic organisations and criminalising ulama (scholars)."

Khairudin said he tended to believe reports on social media that President Joko Widodo was the son of communists and was not a Muslim, but did not provide any evidence of this or of a rise in communism.

Widodo has denied having any communist ties.

Communism remains an emotive issue in Indonesia and the protest took place on the eve of the 52nd anniversary of the murder of six army generals and a young lieutenant by rebel armed forces personnel, which prompted the retaliatory slaughter of at least 500,000 alleged communists.

The massacres ushered in more than 30 years of authoritarian rule under Suharto, the former general who led the communist purge.

Indonesia's Communist Party (PKI), once one of the world's largest, remains outlawed, however, and there appears to be little evidence of a Marxist ideology taking hold in Indonesia.

Just 12 percent of respondents to a September survey of 1,220 Indonesians believed the party was making a comeback now.

Analysts and government advisers said the fomenting of a "red scare" was aimed at Indonesia's reformist president Widodo, who has previously been falsely accused of being the descendant of communists.

"We support parliament in ridding itself of PKI," Slamet Maarif, one of the rally organisers told the crowd, accusing the government of oppressive measures and of creating a gulf between the state and Islam with a decree banning some organisations.

Friday's rally has been organised by hardline Islamist groups, such as the Islamic Defenders Front (FPI).

The FPI led huge rallies last year that successfully demanded the jailing for blasphemy of Basuki Tjahaja Purnama, an ethnic Chinese Christian who was Jakarta's governor at the time.