Hundreds of students later occupied a Chilean TV station until producers agreed to air their message.
In the evening thousands of students and professors attempted to meet at Plaza Italia in the country's capital Santiago after earlier clashes at spots across the city where students had set up barricades of burning tires, bringing traffic to a standstill.
Deputy Interior Minister Rodrigo Ubilla confirmed that 527 people were arrested and 14 wounded in clashes.
|Chilean riot police patrol near La Moneda Presidential palace following protests against the government of President Sebastian Pinera and a the new education law in Santiago, Chile on August 4, 2011.|
About 200 students staged a peaceful takeover of Chilevision television station to express their demands, said one of the station's reporters, Macarena Pizarro.
After producers agreed to record and air a message from the students, they began to leave the station, Pizarro said.
Students in Chile want the national government to take over the public school system, where 90 percent of the country's 3.5 million students are educated. The students say the system is underfunded and deeply inequitable.
Students and teachers had announced a national strike and two marches would take place on Thursday, but Interior Minister Rodrigo Hinzpeter said the government had not granted permission for the demonstrations.
"There are limits, and we've gone past them," government spokesman Andres Chadwick said on national radio, referring to the multiple protests staged over the past several months.
"The students do not own the streets."
Protests have been mounting since President Sebastian Pinera announced wide-ranging education spending cuts earlier this year despite the country having one of the fastest growing economies in Latin America.
Chile currently dedicates 4.4 percent of the country's gross national product to education, far below the seven percent recommended by UNESCO.
Pinera has called on the students to reach a negotiated solution with the government, which this week presented a 21-point proposal for resolving the crisis -- the second such offer since the conflict began.
The proposal would meet one of the students' key demands by enshrining the right to quality education in the constitution, and it includes an increase in grants and lower interest rates on student loans.
Students were expected to officially respond on Friday, but the proposal has already been rejected by several powerful student unions.
Last month, at least 32 police were wounded and 54 demonstrators arrested as police used water cannons and tear gas to disperse tens of thousands of protesters, who fought back with sticks, rocks and plastic bottles of paint.