Police on Friday dispersed Moslem fundamentalists who gathered in a downtown square in the Algerian capital for morning prayers after two days of riots triggered by President Chadli Bendjedid's economic austerity measures.

The military Thursday banned all protests and public meetings, and a state of emergency was imposed in the Algerian capital following rioting described as the worst since Algeria gained independence from France in 1962.Bendjedid declared a curfew from midnight to 6 a.m. in Algiers after rioters roamed the streets of the Mediterranean city burning automobiles and attacking shops and offices on the second day of riots.

At least two people were killed Thursday evening in clashes with troops backed by tanks and armored cars, hospital sources said. Some residents who visited hospitals Friday said they saw many dead and scores of wounded.