Police say they "feared the worst" as about 90,000 people joined the pro-Palestine protest on the Sydney Harbour Bridge, dwarfing the numbers that organisers had expected.
Leaders say the situation turned"perilous" and there was the threat of a crowd crush at the last-minute rally that went ahead after a court order yesterday.
Famous faces including WikiLeaks founder Julian Assange and former soccer star turned activist Craig Foster joined the rally, whichorganisers had originally been denied permission for.
Police say organisers had indicated about 10,000 people were expected to turn up, but got almost 10 times that despite torrential rain.
Police had warned they were"scrambling" in the wake oflast night's court decision to allow the rally to go ahead.
Partway through the march, attempts began to try to halt the flow of people onto the bridge.
Original plans to allow the crowds to disperse once they reached North Sydney were abandoned amid fears the station would be overwhelmed.
The marchers were told to stop and turn back over the bridge, which resulted in"confusion", officers said.
It's understood crowds were so huge, some had not even made it onto the bridge before the decision to halt the march.
Acting Assistant Commissioner Adam Johnson said he"feared the worst".
"I can honestly say in my 35 years of policing that was a perilous situation," Johnson said.
"I was worried we were going to have a major incident with loss of life.
"We had more people than I've ever seen in a small confined space.
"We were really overwhelmed with numbers."
He thanked protesters for listening to instructions from geo-targeted texts.
"Please remain calm and follow directions by police," the text messages geo-targeted for the CBD said.
"In consultation with the organisers, the march needs to stop due to public safety and await further instructions," another read.
On social media, organisers Palestine Action Group said"too many people" had joined the march and they told people to turn back.
Acting Deputy Commissioner Peter McKenna said police were not opposed to protests, but said the incident showed why they needed more time to plan their policing.
"Today showed us we had to scramble. We had to make snap decisions," he said.
"It came very close to us almost having a catastrophic situation.
"Gee whizz, I wouldn't like to try and do this every Sunday at this short notice."
More than 1000 police officers were deployed to handle the crowds.
The bridge, which closed at 11.45am, began to reopen about 5pm, an hour later than planned.
Some city train stations, including Wynyard and Town Hall, had to be closed after becoming too packed with protesters trying to leave.
Tense scenes in Melbourne
Thousands of pro-Palestine protesters were met with a wall of police, refusing to let them onto the King Street Bridge in Melbourne.
The tense showdown followed a peaceful march through the city.
