Representatives of the National Socialist Nordic Resistance Movement are refusing to leave the square where today's march was to begin, according to Sweden's TT newswire.
The leaders of the party have complained that Sweden's police have not allowed them to march on the full route they had proposed and so will instead remain at the Kungsholmstorg square.
"That's no problem for us, whatever happens we will take care of it," Lars Byström, a spokesman for the Stockholm Police told The Local. "So far, it has been quite calm and quiet."
The demonstration began with of a phalanx of male NMR supporters holding banners, while music played from a set of loudspeakers. One was wearing a t-shirt with the slogan "100 percent National Socialist".
Later, NMR representatives began reading out a list of "traitors of the people", which include large numbers of politicians from both left and right.
Three NMR activists were also seen waving a flag from a rubber motorboat outside Sweden's national parliament, while playing a pre-recorded speech from a loudspeaker.
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An antifa counter-demonstration in the nearby Kronobergsparken drew around 200 protestors, according to police.
Earlier in the day, the centre-right Centre Party, which is trying to position itself as an "anti-Nazi" party, sent a boat to the waters of the square, decorated with LGBT rainbow flags and the Centre Party logo, which played loud fag music.
According to a press release, the party had loaned the boat out to a Lesbian couple, Ellinor and Marielle in order to "celebrate love and openness". The couple married eachother while protesting against the NMR march.
The Centre Party was not the only political party to position themselves against the Nationalist protesters.
Alice Bah Kuhnke, Sweden's Green Party culture minister, attended the counter-demonstration alongside handball player and feminist blogger Linnea Claesson and the holocaust survivor Hedi Fred.
She told TT that the Green Party wanted to change public order laws so that police would be better able in future to prevent similar neo-Nazi demonstrations from taking place.
Liberal Party leader Jan Björklund was also at the counter-demonstration.
"My mother came to Sweden as a refugee during the Nazi period. She died last year and I feel almost thankful that she never had to experience this," he told the Expressen newspaper. "We must stand up for freedom and democracy."
According to Lars Byström seven activists were picked up by the police on Friday night and sent back to their homes on Saturday morning so they could not take part in the march.
"We made a judgement that they represented a risk for order and security," he told TT.
He would not give any details as to who the people were or which part of Sweden they came from.