Protesters set a bank in the Greek capital on fire as scores of demonstrators tried to storm parliament, throwing chunks of marble at police, who responded with volleys of tear gas and stun grenades. The fire brigade said at least three people had died in the fire.
The clashes took place during a march against austerity measures, the largest since the country was gripped by a debt crisis in October last year.
Violence also broke out in the northern city of Thessaloniki, with youths smashing windows of stores and fast food restaurants.
The demonstrations came as Greece ground to a halt on Wednesday, paralysed by a nationwide general strike in the first major test of the socialist government's resolve to push through unprecedented austerity cuts needed to avert a fiscal meltdown.
Public transport was halted, ferries were holding at docks and air traffic was grounded as unions went on the warpath against the latest wave of spending cuts and tax hikes.
As the violence escalated in Greece, Angela Merkel, the German chancellor, warned that the future of the European Union was at stake as the crisis over the Greek bailout pushed the euro to a 13-month low against the dollar.
Ms Merkel defended her decision to back the unpopular measure and called on fellow politicians to give their support.
"The future of Europe and the future of Germany within Europe is at stake," Ms Merkel told the German parliament, which will vote on Friday on a package that would see Germany lend 22.4 billion euros (£19 billion) in taxpayers' money to Greece.
Ms Merkel's cabinet agreed on Monday to the German contribution to a three-year €110bn (£95bn) EU and International Monetary Fund bail-out for Greece. But investors doubt that the loan will be able to stop contagion to other vulnerable eurozone countries, including Spain, Portugal, Ireland and Italy, which also have debt problems. Investors have warned that these countries may require even larger bailouts.