Thousands of Sri Lankans, protesting against the arrest of losing presidential candidate Sarath Fonseka, clashed with government supporters on Wednesday, a day after parliament elections were called.

Tensions have risen on the island since former army commander Fonseka was arrested on Monday by military police.

Fonseka and President Mahinda Rajapaksa worked together in ending the 25-year war against Tamil Tiger separatists last year, but fell out soon after.

"We came here to do a peaceful protest against the arrest of General (Fonseka), but government thugs attacked us," said K.H. Indrani, a supporter of the former army general.

"They stoned us and attacked with clubs and even threw glass bottles at us in front of these police force," she said, pointing at riot police.

At least eight people were injured in the clashes outside the island nation's Supreme Court, officials said. Police fired tear gas to disperse the crowds.

The protest erupted a day after Rajapaksa dissolved parliament and called early elections, hoping to build on his own victory in the presidential poll last month.

Analysts said the opposition will try to use the arrest of Fonseka as a rallying point to regroup in the parliament election election set for April 8, but it would be a long haul.

Street protests, strikes, and labour unrest could have a ripple impact on Sri Lanka's $40 billion economy, which is poised to grow over 6 percent this year due to post-war economic optimism and high foreign investments.

Fonseka lost by an 18 percentage point margin to President Rajapaksa in the January poll, after which he accused his former commander-in-chief of rigging the vote.

The government has said Fonseka would be court-martialled on charges of conspiring against the president.

Under Sri Lankan military law, the armed forces can arrest and try personnel who have left service for up to six months after their departure.

Reuters