The United States has hit Venezuelan President Nicolas Maduro with financial sanctions after he staged an election to rewrite the constitution.

The sanctions freeze any assets Maduro may have in US jurisdictions and bar Americans from doing business with him.

It follows threats by the US last week that they would act against Maduro and his socialist government if they went ahead with the election.

Electoral authorities claimed more than eight million people voted on Sunday to create a constitutional assembly giving Mr Maduro's ruling party virtually unlimited powers.

However independent analysts estimated the real turnout was less than half that figure.

Anti-government demonstrators in Caracas on Sunday. Credit: AP

Treasury Secretary Steven Mnuchin said: "Yesterday's illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people.

"By sanctioning Maduro, the United States makes clear our opposition to the policies of his regime and our support for the people of Venezuela who seek to return their country to a full and prosperous democracy."

Opposition leader Henrique Capriles, the governor of the central state of Miranda, urged Venezuelans to protest on Monday against an assembly that critics fear will effectively create a single-party state.

Pedestrians walk past a barricade made by anti-government demonstrators in Caracas on Monday, Credit: AP

Mr Maduro has said the new assembly will begin to govern within a week.

He said he would use the assembly's powers to bar opposition candidates from running in gubernatorial elections in December unless they sit with his party to negotiate an end to hostilities.

At least 125 people have been killed and another 2,000 injured over four months of protests.

Venezuela's chief prosecutor's office reported 10 deaths in new rounds of clashes on Sunday between protesters and police.

Police clash with anti-government demonstrators in Caracas on Sunday. Credit: AP

Mr Maduro said a new constitution is the only way to end such conflicts.

"The people have delivered the constitutional assembly," he said on national television.

"More than eight million in the middle of threats ... it's when imperialism challenges us that we prove ourselves worthy of the blood of the liberators that runs through the veins of men, women, children and young people."

Nations including Argentina, Canada, Colombia, Mexico, Panama, Paraguay, Spain, Britain and the United States said they would not recognise Sunday's vote.