Authorities in Algiers announced Monday they had banned an opposition rally set for the capital next Saturday to call for an end to Algerian President Abdelaziz Bouteflika's rule.
The city hall said the march planned by an opposition umbrella group could be held in any one of several indoor venues in the capital instead.
However, the opposition Rally for Culture and Democracy (RCD) said it would defy the order and go ahead with the march.
"We have decided to march peacefully through Algiers regardless of the decision of the authorities," spokesman Tahar Besbes told AFP by telephone.
"If they want to stop this march, they will have to assume their responsibilities."
The authorities had already banned an RDC rally on January 22 in Algiers.
Algeria's RCD is part of the National Coordination for Change and Democracy (CNCD), which is composed of opposition parties and civil society groups, which had called on its supporters to rally Saturday for the lifting of a 19-year-old state of emergency and a "change of system".
The CNDC said on Saturday it intended to press ahead with the rally despite a series of liberalization measures announced by Bouteflika a month after food riots had killed five people at the beginning of January.
The opposition is demanding the immediate end of Bouteflika's rule, citing the same problems of high unemployment, housing problems and soaring costs that have inspired uprisings in neighboring Tunisia and Egypt.
Time for a shake-up
A prominent member of Algeria's ruling elite said on Monday it was time for a shake-up of the government, a rare criticism from inside the establishment and a sign that uprisings around the Arab world are increasing pressure for change.
Zohra Drif Bitat, a vice-president of Algeria's upper house of parliament who was appointed by Bouteflika, launched a scathing attack on the government, saying it had been unable to translate huge energy wealth into a better life for ordinary people.
"Are we going to continue to tackle our problems with the same actors who have failed? Don't we need new blood?" she said on state radio.
"I hope and expect a radical change in the mode of governance," she said.
There were local media reports last week that Bouteflika was preparing to reshuffle his government, and possibly fire Prime Minister Ahmed Ouyahia, but this has not been confirmed by any officials.
Drif Bitat's words carry weight because she is at the heart of Algeria's ruling elite, which was forged in the 1954-62 war for independence from France.
She is a veteran of the war and her late husband, Rabah Bitat, was one of a six-strong underground committee which launched the liberation struggle, earning him iconic status among Algerians for whom the fight against France was a defining moment.
Drif Bitat expressed skepticism about a government program to spend $286 billion by 2014 to modernize the economy and build new infrastructure.
"We are given figures ... an avalanche of figures, but the results on the ground don't reflect what has been spent. Why?" she said in an interview with the Chaine 3 radio station.
She praised Bouteflika's promise to lift the state of emergency in the near future, and echoed allegations from the opposition that it had been exploited to restrict political freedoms.
"This is the first time in our country and in the Arab world that a president is responding to the peoples' demands," she said.
An Egyptian-style revolt in Algeria could have far-reaching economic implications because the country is a major oil and gas exporter which is also fighting an al-Qaeda insurgency.
However, analysts say a popular uprising is unlikely because the government can draw on energy revenues to buy off most grievances.