By Harriet Torry and Anton Troianovski 

BERLIN--A police decision on Monday to ban a regular anti-Islam march and counter-protests in the eastern city of Dresden on security grounds drew criticism from opposition politicians, who slammed the move as a worrying restriction on freedom of speech.

Local police have banned all public gatherings in Dresden on Monday, citing death threats sent to a leader of Patriotic Europeans Against the Islamization of the West, known by its German initials as Pegida. The group has staged weekly rallies in the eastern city of Dresden since October, with crowds reaching as many as 25,000-strong last Monday.

A senior member of the Green Party described the ban as a "bitter" restriction on fundamental rights, for which the police should answer.

"The Pegida demonstration is abhorrent, but naturally our authorities have to make sure that it is possible to make abhorrent expressions of opinion," Anton Hofreiter, co-chairman of the Green Party parliamentary group, said early Monday on broadcaster ZDF.

The far-left Die Linke party also criticized the police decision. Ulla Jelpke, party spokeswoman on interior affairs, told WDR radio that authorities need to produce evidence of a serious attack to justify encroaching on freedom of assembly.

Pegida canceled its rally after police banned all open-air gatherings in the city Monday, saying the decision was justified by an acute threat of terrorism. The police said unidentified individuals had called on potential assassins to mix in with the Pegida protesters, in order to kill a protest organizer. An Arabic-language Twitter account had used similar language describing Pegida demonstrators as enemies of Islam, the police order said. As there were no clues as to the identity of the potential attackers, the police said, "there are no appropriate police measures to repel the existing danger."

Katrin Oertel, one of the Pegida organizers, said on the Günther Jauch talk show late Sunday that police had informed Pegida on Saturday of a threat "from the Islamist field" of an attack during Monday's demonstration against Pegida's most prominent organizer, Lutz Bachmann.

Pegida asked its supporters via its Facebook page to display a candle and a German flag in their front windows on Monday evening.

The cancellation comes as Pegida is attempting to refashion itself into a more prominent political force. After her appearance on the popular Günther Jauch show on Sunday night, Ms. Oertel told reporters at a news conference in Dresden that Pegida leaders were planning meetings with politicians in the coming days, without specifying which ones.

"We don't want a revolution," she said. "What we want is a different relationship between politicians and the people."

Write to Harriet Torry at harriet.torry@wsj.com and Anton Troianovski at anton.troianovski@wsj.com

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