A Madagascar army unit siding with anti-government protesters installed a new military chief on Sunday as President Andry Rajoelina denounced an "attempt to seize power illegally."

The soldiers from the Capsat contingent joined protesters for a second day in a row, attending a rally in the capital to remember the people killed in more than two weeks of anti-government demonstrations that erupted on September 25.

The unit, which played a major role in a 2009 coup that first brought Rajoelina to power, on Saturday declared it would "refuse orders to shoot" on demonstrators.

Soldiers then entered the city centre to meet several thousand protesters, who welcomed them with jubilation and praise.

Early on Sunday the contingent claimed in a video statement that "from now on, all orders of the Malagasy army – whether land, air or the navy – will originate from Capsat headquarters."

Hours later, its pick for new Chief of the Army Staff, General Demosthene Pikulas, was installed during a ceremony at the army headquarters attended by the armed forces minister, Manantsoa Deramasinjaka Rakotoarivelo.

"I give him my blessing," said the minister, who was appointed by Rajoelina last week.

Pikulas admitted to journalists that events in Madagascar over the past few days had been "unpredictable." "So the army has a responsibility to restore calm and peace throughout Madagascar," he said.

Asked about calls for Rajoelina to resign, he said he refused to "discuss politics within a military facility."

Rajoelina said earlier on Sunday that "an attempt to seize power illegally and by force, contrary to the Constitution and to democratic principles, is currently under way."

"Dialogue is the only way forward and the only solution to the crisis currently facing the country," he said in a statement.

Capsat Colonel Michael Randrianirina said his unit's decision to join the protesters did not amount to a coup. "We answered the people's calls, but it wasn't a coup d'etat," he told reporters. (AFP)