The city’s two main hospitals have told BBC 264 people have been injured, including at least 26 policemen.
Demonstrators loyal to opposition politician Imran Khan and cleric Tahrul Qadri have been taking part in a sit-in for two weeks.
They want Mr Sharif to resign, alleging corruption and electoral fraud.
Islamabad army chief Khalid Khatak told the BBC that close to 100 protesters had been arrested at the scene.
“Many of them were armed with axes, hammers and cutters, and I’m sure they also have firearms though we haven’t seen one yet,” he said.
On Friday Pakistan’s powerful army chief, Gen Raheel Sharif, stepped in to mediate amid an ongoing deadlock.
Imran Khan ended talks with the government last week.
A government minister said that repeated attempts to resolve the two-week long standoff with protesters had failed.
Speaking to BBC World TV, cleric Qadri condemned the police’s actions as an “unimaginable attack by the state upon the people”, and denied that protesters were armed with weapons.
Local TV pictures showed police throwing tear gas shells, and protesters throwing rocks back at them, some wielding sticks and slingshots.
An official at the Polyclinic hospital in Islamabad told reporters that the wounds of those injured were caused by teargas shells, stones and batons.
Two of the injured are reported to be in critical condition.
A BBC journalist in Islamabad said that neither Imran Khan nor Tahrul Qadri were anywhere to be seen, despite both having said in their latest speeches that they would lead the advance to Mr Sharif’s house.
