Hours after facing down a general strike that saw protesters clash with police, Spain's right-leaning government is to unveil massive cuts in what may be the toughest budget of the post-Franco era.

Prime Minister Mariano Rajoy has said he is determined to stand by his promises to eurozone partners to slash the deficit, even at a time of soaring unemployment and recession.

Hundreds of thousands of protesters swamped Spain's streets on Thursday to back a general strike, marred by clashes in Barcelona where youths set fire to a two-storey Starbucks.

Unions said nearly a million people took part in Madrid alone to decry labour reforms, spending cuts and unemployment.

Demonstrations, overwhelmingly peaceful in most of the country, erupted in violence in a central portion of the northeastern city of Barcelona. Scuffles also broke out earlier in Madrid.

Police fired smoke cannisters and rubber bullets in Barcelona, television pictures showed, as a rubbish container burned in a city street.

One group was "provoking confrontations and violent incidents," said a Catalan interior ministry spokesman.

"They burned a two-storey Starbucks cafe and another shop. It is out now. In the shop there is broken glass and they took out whatever they could burn."

Many rubbish containers were also set alight, police said.

A spokesman for the Catalan government, Francesc Homs, said a minority had taken advantage of the protest. "I don't think this is linked in any way to the unions," he said.

It was the first national strike to challenge Rajoy, who was sworn in 100 days ago vowing to cut Spain's 23-percent unemployment rate and fix its faltering finances.

The Popular Party government must craft a 2012 budget to bring down the public deficit to the equivalent of 5.3 percent of economic output this year from 8.51 percent last year.

That means at least 20-30 billion of euros ($26-40 billion) in austerity measures, on top of 8.9 billion euros in spending cuts and 6.3 billion euros in tax increases already announced this year.

Spain needs to squeeze about 50 billion euros out of the budget if it is stand by its deficit-cutting targets and calm mounting concern in Europe and on financial markets, analysts say.

The task is complicated by the recession, with the government predicting a 1.7-percent slump in economic output this year.

Spain's major CCOO and UGT unions called the strike over the government's February 11 labour reform which makes it cheaper to lay off staff and easier to cut salaries.

Minimum service agreements kept schools and hospitals open, ensuring 30 percent of trains and buses ran, and allowed some planes to fly despite Iberia, Air Nostrum and Vueling cancelling two-thirds of flights.

Unions claimed a big turnout especially in factories, but interior ministry policy chief Cristina Diaz said fewer people took part than in the last general strike in September 2010.

Across Spain, police arrested 176 people while 58 police and 46 civilians were injured, she said.

In one incident a policeman hit a protester with his baton, cutting him above the eyebrow as he and others tried to stop buses leaving a station in southern Madrid, an AFP photographer said.

In Barcelona police said 21 people were arrested.

At a union rally in central Madrid, 56-year-old civil service worker Angel Escolar said the labour reform removed basic workers' rights.

"They can change your hours, change your shifts, cut your salary and lay off people without justifying it. They are going to throw us out and hire young people for less and with worse conditions," he said.

Many commuters still crowded train stations and bus stops, saying they could not afford to lose a day's pay.

"I can understand why they strike. The reform is just to fire people more easily and more cheaply," said underground commuter Pedro Moreno, 32, who works at a supermarket.

"But this is not the time to lose work days. I am lucky to have a job," he added.